What is Megan’s Law in Real Estate? 

This law was created in response to an actual event that happened in New Jersey. In 1994, there was a tragic rape and murder of a 7-year-old girl named Megan Kanka. Her killer was a neighbor and he had been previously convicted of sexual crimes against a minor.

At this time, there was no way to research a person convicted of sexual crimes. To prevent a similar situation from happening again, lawmakers introduced Megan’s Law.

Megan’s Law is a federal law that requires convicted sex offenders to enter their names on a registry. Some states also require these offenders to notify their community when they relocate. This action is considered part of SORN, Sex Offender Registration and Notification, laws. 

So, interesting information — but what does it have to do with real estate?

Megan’s Law and Buyers

As an agent, Megan’s law will directly affect you when it comes to working with both buyers and sellers. Let’s start with how the Megan’s Law disclosure comes into play when you are representing a buyer.

It’s usually a very exciting and emotional time for your clients. For most people, this is the largest investment they will make in their lifetime. A home can represent stability and a chance to plant roots and build a family.

When you help your client find the house of their dreams, you get to be a part of that experience and people are usually happy.Your buyers have found the right house, the offer is accepted, and escrow is opened! 

Escrow is a legal and binding contract so it’s crucial that everything goes smoothly. An important part of this process is the disclosures. The disclosures are given by the sellers to the buyers. They cover everything about the house itself and the area surrounding the house.

One of these documents will be Megan’s Law disclosure. 

It lets the buyers know where they can access the information regarding sexual predators. This will be extremely important to your buyers who have families with young children. 

In California, you can go online to MegansLaw.ca.gov and the information is publicly available for anyone to view. You can see where registered sex offenders live by entering an address. For example, the address of the new house you want to purchase.

It gives buyers the opportunity to evaluate the neighborhood and make an informed decision on whether or not they want to purchase the home. If the results are unfavorable, they have the right to cancel the escrow and get their earnest money deposit back.

Megan’s Law is instrumental for buyers in ruling out houses in an area where sexual predators reside. However, there is another side to this.

What if you’re representing the seller?

Does Megan’s Law Hurt Sellers?

At face value, it may seem that Megan’s law can hurt a homeowner’s chance of selling their home. After all, the database shows where all registered sex offenders currently live and it could lessen their chances of selling their homes.  

Also, the database does not take into account that the homeowner may have purchased their home BEFORE an offender moved into the area. 

Is it fair that this information can immediately lower the value of their house? Is it right that it may make it more difficult to sell their home? We don’t think so, and neither does the state of California.

So let’s talk about how this works when you are representing the seller.   

It comes back to the disclosures. As a real estate agent representing the seller, it is your responsibility to give the disclosures to the buyer. This includes everything that the seller is aware of regarding the property and the area. 

The key phrase is “everything that the seller is aware of”. It’s important to remember that you only have to disclose the information you know — you don’t have to do research beyond what you already know to be true.

Megan's Law Database Disclosure Form

As we know, one of those documents is Megan’s Law Database Disclosure form. This form lets the buyers know that there’s a website where they can check the proximity of sexual predators in the area. This is where the responsibility on the seller's side ends.

The responsibility is not on the seller to look up any sexual offenders nearby – it falls on the buyer. 

While buyers understand that this information is out there and available, some may choose NOT to do their due diligence on the neighborhood. This means that the information potentially doesn’t become a factor in choosing to proceed with the escrow.   

When the buyers sign the disclosure form, they are saying that they are aware of the website, they are waiving their right to contest the findings, and that the escrow is proceeding.

In this way, the information is disclosed, the seller is not adversely affected and has an equal opportunity to sell their home.

Final Thoughts About Megan’s Law

As an agent, your responsibility is to provide the proper disclosures to your client and protect their interests. We know that disclosures are designed to both inform and protect both you and who you are representing. 

Not disclosing this information will hurt you as an agent. If you don’t disclose this information for fear of not selling the listing, the buyer can sue you and your seller if they discover a sexual predator after the transaction. 

The same situation can happen if you are representing the buyer. Don’t fail to properly inform your buyer because you believe it will affect their decision to buy. In the end, it is not worth the liability.  

It is understandable that having to discuss or disclose the topic of sexual predators can be uncomfortable. That is why Megan’s Law Disclosure is so crucial. But it is necessary, so it’s important to not bury any facts. We can’t stress this enough.