Spuds is what REALTORS call the Seller character Disclosure Statement (SPDS). It is a multi-page document that sellers typically provide with information about the house and all its major systems (e.g. air conditioning, plumbing, roof, etc.).
In Arizona, sellers are required to disclose any material fact they are aware of regarding the character. The SPDS is a form produced by the Arizona Association of REALTORS (AAR) to standardize the way sellers disclose material facts about the character.
The standard AAR Residential buy Contract has a provision requiring sellers to provide SPDS to buyers within 5 days of contract acceptance. Buyers have until the end of the inspection period or 5 days from receipt of the SPDS (whichever is later) to provide notice of any disapproved items disclosed in the SPDS.
Contrary to what many people think, the SPDS is not required by law. It is only a provision in the standard AAR Residential buy Contract. The law requires sellers to disclose material information. Sellers can do it in any other document they choose.
The other shared myth about the SPDS is that once the seller provides it, he has no further obligation to disclose new material facts. That could not be farther from the truth. Seller’s obligation to disclose remains during the whole escrow period. If seller becomes aware of a material fact that was not originally disclosed, he has an obligation to disclose and give the buyer 5 days to review and provide notice of disapproved items. This is typically done by issuance of a revised SPDS.
Many sellers will not accept contracts that require them to provide a SPDS and they will ask buyers to remove the provision from the contract. edges selling foreclosures will typically ask buyers to waive SPDS based on the claim that the bank has limited knowledge about the character. One important thing to remember is that already when SPDS is waived, the seller nevertheless has the obligation to disclose all material facts.
Your REALTOR should review the SPDS, its importance, and implications when sellers ask buyers to waive SPDS. Buyers should understand all the ramifications and make an informed decision whether they are willing to waive SPDS or not.
And before I close this article I would like to leave you with a thought. If you are a seller, I would strongly encourage you to prepare a SPDS when you put the character on the market. You can already make the document obtainable for prospective buyers. It will show them that you are on top of your obligations and that if they decide to submit an offer you will not cause any delays to the time of action. Very few sellers do that and it usually has such a positive impact on possible buyers. If you do that when you list the character, once you accept an offer all you have to do is re-read the document and make sure that it is nevertheless valid and up-to-date. Ask your REALTOR to help you fill the SPDS as soon as possible.