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Sellers and landlords must disclose known material facts about properties. Disclosure requirements vary by state but share common elements mandated by federal law and standard practice. Failure to disclose known issues can result in legal liability, rescission of sales, and damages.

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Federal Disclosure Requirements

Federal law requires certain disclosures regardless of state.
For homes built before 1978, sellers and landlords must:
  • Disclose known lead-based paint and hazards
  • Provide EPA pamphlet “Protect Your Family From Lead in Your Home”
  • Include lead disclosure language in contracts
  • Allow 10 days for buyers to conduct lead inspection (can be waived)
Applies to sales and rentals. Violations can result in fines up to $19,507 per violation.
Lenders must notify borrowers if property is in a Special Flood Hazard Area (SFHA). Flood insurance is required for federally-backed mortgages in these zones.Some states require sellers to disclose flood zone status regardless of financing.

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Common State Disclosure Requirements

Most states require disclosure of known material defects. Specific requirements vary but typically include: Structural Issues
  • Foundation problems
  • Roof leaks or damage
  • Water intrusion or damage
  • Structural modifications
Systems and Components
  • HVAC age and condition
  • Plumbing issues
  • Electrical problems
  • Appliance conditions
Environmental Hazards
  • Asbestos presence
  • Radon levels
  • Mold issues
  • Underground storage tanks
  • Contamination from nearby properties
Property History
  • Past flooding
  • Fire damage
  • Insurance claims
  • Major repairs
External Factors
  • Easements and encroachments
  • Boundary disputes
  • Zoning violations
  • Planned development nearby
  • Noise issues (airports, highways)
Legal Issues
  • HOA obligations and violations
  • Liens or judgments
  • Pending litigation
  • Code violations
Disclosure requirements vary significantly by state. Some states require standardized disclosure forms. Others rely on common law “caveat emptor” (buyer beware) with limited mandatory disclosures. Check state-specific requirements.

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What “Known” Means

Sellers must disclose what they actually know. This includes:
  • Defects personally observed
  • Problems reported by inspectors, contractors, or previous owners
  • Issues disclosed when seller purchased the property
  • Repairs made to address problems
Sellers are not required to:
  • Conduct inspections to discover unknown issues
  • Disclose speculative or uncertain conditions
  • Warrant future performance of systems
However: Sellers cannot avoid disclosure by intentionally remaining ignorant of obvious problems.

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Stigmatized Property Disclosures

Some states require or allow disclosure of non-physical property characteristics: Death on property Requirements vary widely. Some states require disclosure of deaths within certain timeframes. Others prohibit asking about deaths. Criminal activity Some states require disclosure of drug manufacturing or other criminal activity. Others prohibit or limit such disclosures. Perceived paranormal activity Most states do not require disclosure. Some specifically exempt sellers from liability for non-disclosure. Sex offender registry Most states do not require disclosure but cannot prohibit buyers from checking public registries.
Stigmatized property disclosure laws vary significantly. What’s required in one state may be prohibited in another. Consult state-specific requirements before making or withholding disclosures.

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Disclosure Timing

Sales transactions: Most states require disclosures before or at contract signing. Some allow disclosure during the inspection period. Rental transactions: Lead paint disclosures required before lease signing. Other disclosures typically required before move-in. Material changes: If conditions change after initial disclosure (new leak discovered, system fails), sellers should provide updated disclosure.

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Disclosure Forms

Many states require standardized disclosure forms: Seller’s Property Disclosure Statement Comprehensive form covering property condition, systems, environmental issues, and legal matters. Lead-Based Paint Disclosure Federal form required for pre-1978 properties. Transfer Disclosure Statement California and some other states require specific transfer disclosure documents. Natural Hazard Disclosure Some states require disclosure of earthquake, flood, fire, and other natural hazard zones.

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”As-Is” Sales

Properties sold “as-is” still require disclosures of known material defects in most states. What “as-is” means:
  • Seller will not make repairs
  • Buyer accepts property in current condition
  • Price may reflect known issues
What “as-is” does NOT mean:
  • Seller can hide known defects
  • Disclosure requirements are waived
  • Buyer has no recourse for fraud
Selling “as-is” is not a substitute for honest disclosure.

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Buyer’s Duty to Investigate

While sellers must disclose known issues, buyers have responsibilities:
  • Conduct inspections
  • Ask questions about concerns
  • Research public records
  • Review HOA documents
  • Investigate neighborhood conditions
Issues that are open and obvious or discoverable through reasonable inspection may not be grounds for claims against sellers.

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Consequences of Non-Disclosure

Failure to disclose known material defects can result in: Rescission Buyer may be able to cancel the sale and recover purchase price. Damages Seller may be liable for repair costs, diminished value, and related expenses. Fraud claims Intentional concealment can result in punitive damages and attorney fees. Real estate license discipline Agents who participate in non-disclosure may face license suspension or revocation.

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Agent Disclosure Obligations

Real estate agents have independent disclosure duties: Listing agents must disclose:
  • Known material facts about the property
  • Material facts discovered during marketing
  • Cannot remain silent about known defects
Buyer’s agents must disclose:
  • Material facts known about the property
  • Information that might affect buyer’s decision
  • Cannot help sellers conceal issues
Agents cannot simply rely on seller disclosures if they have independent knowledge of problems.

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Questions to Ask

For buyers:
  • Has seller completed all required disclosure forms?
  • What repairs or improvements have been made?
  • Have there been any insurance claims?
  • Are there any ongoing disputes or legal issues?
  • What is the age and condition of major systems?
For sellers:
  • What disclosure forms does my state require?
  • What issues am I required to disclose?
  • Should I get pre-listing inspections to identify issues?
  • How should I disclose past repairs?

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