MISSISSIPPI LEGISLATURE

2023 Regular Session

To: Business and Financial Institutions; Judiciary, Division A

By: Senator(s) Boyd, Sparks, Michel, Williams, England

Senate Bill 2647

AN ACT TO AMEND SECTION 73-35-4.1, MISSISSIPPI CODE OF 1972, TO REVISE LIABILITY FOR A REAL ESTATE LICENSEE REGARDING DISCLOSURE OF THE SIZE OR AREA OF PROPERTY; TO AMEND SECTIONS 89-1-505 AND 89-1-523, MISSISSIPPI CODE OF 1972, TO REVISE LIABILITY FOR CERTAIN REQUIRED REAL ESTATE DISCLOSURES; TO AMEND SECTION 89-1-527, MISSISSIPPI CODE OF 1972, TO REVISE LIABILITY FOR THE FAILURE TO DISCLOSE NONMATERIAL FACT; AND FOR RELATED PURPOSES.

     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

     SECTION 1.  Section 73-35-4.1, Mississippi Code of 1972, is amended as follows:

     73-35-4.1.  (1)  (a)  In connection with any real estate transaction, the size or area, in square footage or otherwise, of the subject property, if provided by any real estate licensee in accordance with paragraph (b)(i) and (ii), shall not be considered any warranty or guarantee of the size or area information, in square footage or otherwise, of the subject property.

          (b)  (i)  If a real estate licensee provides any party to a real estate transaction with third-party information concerning the size or area, in square footage or otherwise, of the subject property involved in the transaction, the licensee shall identify the source of the information.

              (ii)  For the purposes of this section, "third-party information" means:

                   1.  An appraisal or any measurement information prepared by a licensed appraiser;

                   2.  A surveyor developer's plan prepared by a licensed surveyor;

                   3.  A tax assessor's public record; or

                   4.  A builder's plan used to construct or market the property.

          (c)  A real estate licensee has no duty to the seller or purchaser of real property to conduct an independent investigation of the size or area, in square footage or otherwise, of a subject property, or to independently verify the accuracy of any third-party information.

          (d)  A real estate licensee who has complied with the requirements of this section, as applicable, shall have no further duties to the seller or purchaser of real property regarding disclosed or undisclosed property size or area information, and shall not be subject to liability to any party for any damages sustained with regard to any conflicting measurements or opinions of size or area, including exemplary or punitive damages.

 * * * (2)  (a)  If a real estate licensee has provided third‑party information to any party to a real estate transaction concerning size or area of the subject real property, a party to the real estate transaction may recover damages from the licensee in a civil action only when a licensee knowingly violates the duty to disclose the source of the information as required in this section.  However, nothing in this act shall provide immunity from civil liability to any licensee who knowingly misrepresents the size or area of the subject real property.

  (b)  The sole and exclusive civil remedy at common law or otherwise for a violation of this section by a real estate licensee shall be an action for actual damages suffered by the party as a result of such violation and shall not include exemplary or punitive damages.

  (c)  For any real estate transaction commenced after the effective date of this section, any civil action brought pursuant to this section shall be commenced within two (2) years after the date of transfer of the subject real property.

  (d)  In any civil action brought pursuant to this section, the prevailing party shall be allowed court costs and reasonable attorney fees to be set by the court and collected as costs of the action.

  (e)  A transfer of a possessory interest in real property subject to the provisions of this section may not be invalidated solely because of the failure of any person to comply with the provisions of this section.

     ( * * *(f)2)  The provisions of this section shall apply to, regulate and determine the rights, duties, obligations and remedies, at common law or otherwise, of the seller marketing the seller's real property for sale through a real estate licensee, and of the purchaser of real property offered for sale through a real estate licensee, with respect to disclosure of third-party information concerning the subject real property's size or area, in square footage or otherwise, and this section hereby supplants and abrogates all common-law liability, rights, duties, obligations and remedies of all parties therefor.

     SECTION 2.  Section 89-1-505, Mississippi Code of 1972, is amended as follows:

     89-1-505.  (1)  Neither the transferor nor any listing or selling agent shall be liable for any error, inaccuracy or omission of any information delivered pursuant to Sections 89-1-501 through 89-1-523 * * * if the error, inaccuracy or omission was not within the personal knowledge of the transferor or that listing or selling agent, was based on information timely provided by public agencies or by other persons providing information as specified in subsection (2) that is required to be disclosed pursuant to Sections 89‑1‑501 through 89‑1‑523, and ordinary care was exercised in obtaining and transmitting it.

     (2)  The delivery of any information required to be disclosed by Sections 89-1-501 through 89-1-523 to a prospective transferee by a public agency or other person providing information required to be disclosed pursuant to Sections 89-1-501 through 89-1-523 shall be deemed to comply with the requirements of Sections 89-1-501 through 89-1-523 and shall relieve the transferor or any listing or selling agent of any further duty under Sections 89-1-501 through 89-1-523 with respect to that item of information.

     (3)  The delivery of a report or opinion prepared by a licensed engineer, land surveyor, geologist, structural pest control operator, contractor or other expert, dealing with matters within the scope of the professional’s license or expertise, shall be sufficient compliance for application of the exemption provided by subsection (1) * * * if the information is provided to the prospective transferee pursuant to a request therefor, whether written or oral. In responding to such a request, an expert may indicate, in writing, an understanding that the information provided will be used in fulfilling the requirements of Section 89‑1‑509 and, if so, shall indicate the required disclosures, or parts thereof, to which the information being furnished is applicable. Where such a statement is furnished, the expert shall not be responsible for any items of information, or parts thereof, other than those expressly set forth in the statement.

     SECTION 3.  Section 89-1-523, Mississippi Code of 1972, is amended as follows:

     89-1-523.  No transfer subject to Sections 89-1-501 through 89-1-523 shall be invalidated solely because of the failure of any person to comply with any provision of Sections 89-1-501 through 89-1-523. * * *  However, any person who willfully or negligently violates or fails to perform any duty prescribed by any provision of Sections 89‑1‑501 through 89‑1‑523 shall be liable in the amount of actual damages suffered by a transferee.

     SECTION 4.  Section 89-1-527, Mississippi Code of 1972, is amended as follows:

     89-1-527.  (1)  The fact or suspicion that real property is or was:

          (a)  The site of a natural death, suicide, homicide or felony crime (except for illegal drug activity that affects the physical condition of the property, its physical environment or the improvements located thereon);

          (b)  The site of an act or occurrence that had no effect on the physical condition of the property, its physical environment or the improvements located thereon;

          (c)  Owned or occupied by a person affected or exposed to any disease not known to be transmitted through common occupancy of real estate including, but not limited to, the human immunodeficiency virus (HIV) and the acquired immune deficiency syndrome (AIDS);

does not constitute a material fact that must be disclosed in a real estate transaction.  A failure to disclose such nonmaterial facts or suspicions shall not give rise to a criminal, civil or administrative action against the owner of such real property, a licensed real estate broker or any affiliated licensee of the broker.

     (2)  A failure to disclose in any real estate transaction any information that is provided or maintained, or is required to be provided or maintained, in accordance with Section 45-33-21 through Section 45-33-57, shall not give rise to a cause of action against an owner of real property, a licensed real estate broker or any affiliated licensee of the broker.  Likewise, no cause of action shall arise against any licensed real estate broker or affiliated licensee of the broker for revealing information to a seller or buyer of real estate in accordance with Section 45-33-21 through Section 45-33-57.  Any factors related to this subsection, if known to a property owner or licensee shall be disclosed if requested by a consumer.

     (3)  Failure to disclose any of the facts or suspicions of facts described in subsections (1) and (2) shall not be grounds for the termination or rescission of any transaction in which real property has been or will be transferred or leased. * * *  This provision does not preclude an action against an owner of real estate who makes intentional or fraudulent misrepresentations in response to a direct inquiry from a purchaser or prospective purchaser regarding facts or suspicions that are not material to the physical condition of the property, including, but not limited to, those factors listed in subsections (1) and (2).

     SECTION 5.  This act shall take effect and be in force from and after July 1, 2023.