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Property Condition Disclosure Law: Why Did States Mandate 'Seller Tell All'?

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  • Anupam Nanda

    (National Association of Home Builders and University of Connecticut)

Abstract

Thirty-six US states have already enacted some form of seller's property condition disclosure law. At a time when there is a movement in this direction nationally, this paper attempts to ascertain the factors that lead states to adopt disclosure law. Motivation for the study stems from the fact that not all states have yet adopted the law, and states that have enacted the law have done so in different years. The analytical structure employs hazard models, using a unique set of economic and institutional attributes for a panel of 50 US States spanning 21 years, from 1984 to 2004. The proportional hazard analysis of law adoption reveals that greater number of disciplinary actions tends to favor passage of the law. Greater broker supervision, implying generally higher awareness among real estate agents, seems to have a negative impact on the likelihood of a state adopting a property condition disclosure law.

Suggested Citation

  • Anupam Nanda, 2006. "Property Condition Disclosure Law: Why Did States Mandate 'Seller Tell All'?," Working papers 2006-16, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2006-16
    Note: This paper is adapted from the first chapter of my doctoral dissertation at the University of Connecticut, Storrs, CT. I would like to thank my advisors, Stephen L. Ross, John M. Clapp, and Dennis R. Heffley for their insightful comments on the idea and methodology. I would also like to thank Tim Storey (National Conference of State Legislatures), Daniel Conti (Bureau of Labor Statistics) for assistance with data. All remaining errors are mine.
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    References listed on IDEAS

    as
    1. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-679, June.
    2. Arellano, Manuel & Honore, Bo, 2001. "Panel data models: some recent developments," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 53, pages 3229-3296, Elsevier.
    3. Anupam Nanda, 2005. "Property Condition Disclosure Law: Does 'Seller Tell All' Matter in Property Values?," Working papers 2005-47, University of Connecticut, Department of Economics, revised Jul 2006.
    4. George Lefcoe, "undated". "Property Condition Disclosure Forms: How REALTORS Eased the Transition from Caveat Emptor to "Seller Tell All"," University of Southern California Legal Working Paper Series usclwps-1008, University of Southern California Law School.
    5. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, December.
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    Cited by:

    1. Daniel Broxterman & Tingyu Zhou, 2023. "Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 203-298, February.
    2. Anupam Nanda & Stephen Ross, 2012. "The Impact of Property Condition Disclosure Laws on Housing Prices: Evidence from an Event Study Using Propensity Scores," The Journal of Real Estate Finance and Economics, Springer, vol. 45(1), pages 88-109, June.
    3. Thomas J. Miceli & Michael P. Stone, 2013. "The Determinants Of State-Level Caps On Punitive Damages: Theory And Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 31(1), pages 110-125, January.
    4. Anupam Nanda & Katherine A. Pancak, 2009. "Broker Duty to Clients: Why States Mandate Minimum Service Requirements," Alumni working papers 2009-01, University of Connecticut, Department of Economics.
    5. Walsh, Patrick & Mui, Preston, 2017. "Contaminated sites and information in hedonic models: An analysis of a NJ property disclosure law," Resource and Energy Economics, Elsevier, vol. 50(C), pages 1-14.

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    More about this item

    Keywords

    Property Condition Disclosure; Law Adoption; Hazard Analysis; Housing Price Index;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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