Hawaii Real Estate State Practice Exam

What is the statute of limitations on undisclosed defects in residential property transactions?

1. Two years from discovery

2. Two years after closing

3. Two years from the date the buyer received the disclosure

4. Two years after acceptance of the Purchase Contract

The correct answer is: Two years from the date the buyer received the disclosure

The statute of limitations on undisclosed defects in residential property transactions is two years from the date the buyer received the disclosure. This means that if a buyer discovers a defect in a property that was not disclosed by the seller, they have a two-year period starting from when they received the necessary information about the defect to take legal action. This timeframe aligns with the principle that buyers should be made aware of any potential issues that could affect their use and enjoyment of the property. Understanding this timeline is crucial for buyers and real estate professionals alike, as it establishes a clear cutoff for potential claims regarding undisclosed defects. It clarifies the buyer's rights and responsibilities regarding disclosure and planning for any necessary legal recourse. Other responses may suggest different starting points for the statute of limitations, but these do not align with the statutory framework surrounding real estate disclosures. For instance, suggesting that the limitations period is tied to the closing date or the acceptance of the purchase contract could imply that buyers have unlimited time to respond after these events, which is not the case. The law is designed to provide a definite period during which parties can ensure all issues are addressed promptly.