What Disclosures Does a Seller Have to Make About Their House?

What a seller is legally obligated to share with a potential buyer.

Whether you're looking to buy a house or trying to sell one, it's important to understand what must be disclosed about a house before a sale is made. Real estate disclosures are details about the property that a seller is legally obligated to share with a potential buyer. This can include things like defects and property history that may affect the value of the home, and in turn, affect a buyer's decision to purchase.

What Is a Property Disclosure Statement?

A disclosure statement is a written document that a seller must fill out regarding the condition of their property. It should inform prospective buyers about the property's value, safety, and condition. These disclosures are meant to help protect sellers and buyers by encouraging transparency before completing the transaction.

Are Seller Disclosures Required?

Most states legally require sellers to provide disclosures in real estate transactions. While the central premise of most states' disclosure statements is similar, it's important to understand the different requirements in each state. For example, some states require a seller to disclose problems with the land, while others just require information on the housing structure itself.

"Buyer Beware" States

Additionally, a few states have no regulations on a written disclosure statement, employing the caveat emptor rule (caveat emptor is a Latin phrase that translates to "let the buyer beware). In these cases, a real estate agent is typically only liable to disclose things that may be hazardous to the health and safety of a buyer. Look into the requirements of your particular state during the homebuying process so you know what to expect.

Disclosure Statement Help

While most states allow a seller's real estate agent to help them fill out a disclosure statement, certain states, such as California and Hawaii, do not legally allow a real estate agent to help. Instead, a seller must fill it out on their own and consult a real estate attorney.

What if a Seller Is Dishonest on a Disclosure Statement?

While a seller can sell their home "as is, there are legal repercussions, such as being fined, sued in court or even convicted of a crime, for a seller who lies or fails to make proper disclosures about their property. Ultimately, the purpose of a disclosure statement is to lighten the liability of the seller while helping the buyer make an informed purchasing decision.

Common Real Estate Disclosures

Below is a list of common disclosures that are made about a property, bearing in mind varying state and local requirements.

Hazards and Damage

Hazards and damage are arguably the most important for a seller to disclose from a legal perspective. It's also highly recommended that a buyer hire a home inspector to get an expert opinion on the condition of the house. While hazard disclosures vary by state or county, here are some common hazards that are typically required to be disclosed:

Environmental and Health Hazards

• Lead-based paint (may be present in homes built before 1978 in the U.S. and is the only federally mandated disclosure)
• Asbestos (often found in insulation and flooring)
• Mold and mildew, especially toxic black mold
• Drinking water contamination
• Radon gas (a naturally occurring radioactive gas that can seep into basements)
• Carbon monoxide risks
• Methamphetamine contamination (in homes previously used for drug production)

Structural or Property Condition Hazards

• Foundation problems (cracks, shifting, etc.)
• Roof, window, door, or other exterior damage
• Water damage (ongoing leaks and previous damage)
• Pest infestations (termites, rodents, etc.)
• Electrical, plumbing, or HVAC issues
• Septic or sewage problems
• Damage from natural disasters, such as tornadoes

Natural Disaster Risks

• Flood zone status (may require flood insurance)
• Earthquake fault lines or seismic zones
• Wildfire-prone areas
• Hurricane zones
• Sinkhole risks

Repair History

Buyers need to know a home's repair history, such as electrical or plumbing work, so their home inspectors can pay special attention to these areas. A poorly done repair can lead to recurring, expensive problems for the new owner and even create a domino effect of new issues.

Missing Items

Some states require sellers to disclose whether certain items are not included in the sale of the property, such as kitchen appliances, central air conditioning and heating, light fixtures, rain gutters, and water heaters. These are all things that a buyer would likely assume are included in their potential new home.

Nuisances

A legal nuisance is defined as a substantial and unreasonable interference with a person's ability to enjoy their property. Common nuisances include excessive noise, odors, or disruptions that cross property boundaries. To qualify as a nuisance, these interferences must be prolonged and clearly affect the owner's daily life. For example, a seller may include that their property is near a railroad track in their disclosure statement.

Death and Crimes

Most states do not require a death in the home to be disclosed if it was from natural causes or an accident that didn't physically affect the property. However, some states do impose a duty to report what is known as a stigmatized home — a property that has been affected by murder, suicide, alleged hauntings, or an infamous previous owner. In general, a seller may want to err on the side of caution and inform a buyer about any death or violent crimes on the property. It's likely that a buyer will eventually find this information out from the community, so disclosing incidents — regardless of the cause — shows transparency and may even build more trust with the buyer.

Boundary Lines and Easements

Boundary lines and easements affect property rights and usage and should be disclosed to a buyer. An easement is a legal right to enter or use the property by a non-owner, usually having to do with road access or utility and sewer lines.

HOA Rules and Fees

If the property is part of a homeowners or condo association, the seller should disclose the HOA fees and rules known as restrictive covenants. These fees and rules may sway the buyer's decision depending on whether they find them acceptable or not.

Historic Districts

If a house is in a historic district, a defined area with a concentration of structures and sites with historical, architectural or cultural significance, a buyer may face restrictions on renovations, exterior alterations, or property use. In these cases, a homeowner may have to get approval from local committees to make any changes.

In Summary: Home Disclosure Requirements Protect You

While required property disclosures vary by state or county, it's important for sellers to make honest, complete disclosures to ensure a fair sale. Likewise, buyers should be well-informed so they can make confident, informed decisions when it comes to purchasing their next home.