{"id":7030,"date":"2018-12-27T08:19:52","date_gmt":"2018-12-27T16:19:52","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=7030"},"modified":"2026-04-16T00:48:54","modified_gmt":"2026-04-16T07:48:54","slug":"disclosures-in-real-property-transactions","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/disclosures-in-real-property-transactions\/","title":{"rendered":"8 Different Types of Real Estate Disclosures that Come Up in a Home Sale"},"content":{"rendered":"

Top-selling Chicago real estate agent Santiago Valdez<\/a> sensed something was odd about the lovely single-family house with the newly remodeled basement. \u201cIt was a huge plus, but there were inconsistencies on why somebody would spend money in the basement before updating the kitchen, for example, or other key parts of the house,\u201d he explained.<\/p>\n

It turned out that about two years earlier, a sewer line mishap had flooded the basement, and the sellers\u2019 insurance company had paid for the full remodel.<\/p>\n

The Illinois real estate disclosure form<\/a> asks several questions about known flooding, leakage or material defects in the basement, but the sellers hadn\u2019t thought to disclose the home’s history because it was a one-time incident that had been remedied.<\/p>\n

Nevertheless, Valdez recommended the sellers spill the beans about the flooding, and the buyers of the house appreciated knowing all the details.<\/p>\n

Valdez\u2019s case represents the gray area that real estate disclosures often fall into. Disclosure laws in general require sellers to say upfront whether their property has certain known issues that could impact a buyer\u2019s health or safety<\/a>. Because these laws vary by state, sellers might be confused about disclosures in real property transactions, not to mention become nervous. How much should they say? And won\u2019t pointing out a past flaw or maintenance issue scare buyers away?<\/p>\n

When in doubt, agents advise you to disclose, disclose, disclose. Let\u2019s explore why, and get into some of the more common disclosures in real property transactions considered to be standard in the business of buying and selling homes.<\/p>\n

\"Notebook<\/a>
Source: (Matthew Addington\/ Death to the Stock Photo)<\/figcaption><\/figure>\n

What\u2019s the purpose behind real estate disclosure laws?<\/h2>\n

Earlier this year, homebuyers in the Oak Park area of Chicago sued a broker<\/a>, accusing him of failing to disclose water leaks and damage to the home. The lawsuit states that the broker referred to a leak in the basement as a one-time problem that had been fixed, but after the purchase, the buyers found a history of flooding and leaks in the foundation.<\/p>\n

Disclosure laws are meant to protect both sides of the home-purchase transaction, notes Ilona Bray<\/a>, an attorney and author of several real estate guides. Disclosing any issues about major home components, systems, and conditions puts the buyer on notice\u2014and prevents the seller from being held liable for future problems.<\/p>\n

Almost all states have a disclosure form for sellers with questions addressing certain facts, such as the age and condition of the property; the source of its water supply; the nature of its sanitary sewer system; and structural defects, such as a shifting or cracked foundation or walls.<\/p>\n

Disclosure forms also can include information about the current or previous presence of any wood-destroying organisms, such as termites, and problems with mechanical systems, such as the heating, air conditioning, and electrical system. Federal and state laws may require additional disclosures on separate paperwork.<\/p>\n

\u201cAs realtors, we want everything disclosed,\u201d said Paul Fonseca<\/a>, a real estate agent for 23 years Fort Myers and Naples areas.<\/p>\n

\u201cWe want the buyer to know exactly what they\u2019re getting. We want the seller to tell them everything about the house that is accurate. And that way there\u2019s no future issue for us or any liability for anybody.\u201d<\/p><\/blockquote>\n

\u201cI\u2019ve always told [sellers] that things can come back in the future and really hurt you,\u201d Fonseca said. \u201cIf you don\u2019t tell them that you had a leak behind your faucet that you fixed, and it wasn\u2019t done properly, and in the future they find out there\u2019s mold behind that wall and it\u2019s a major issue because now cabinets need to be replaced and whatnot, technically, they can come back to the seller and ask them to pay for all the damages and sue the realtor and everybody.\u201d<\/p>\n

\"A<\/a>
Source: (Jim DiGritz\/ Unsplash)<\/figcaption><\/figure>\n

Are sellers required to fix up any known defects, or what\u2019s the procedure?<\/h2>\n

Disclosure laws don\u2019t apply to regular wear and tear\u2014and you don\u2019t have to repair any defects that you report. The seller also does not have to conduct an investigation to find defects on the property, notes Mark Chernoff<\/a>, an attorney handling real estate litigation in Phoenix, Scottsdale, and throughout Arizona.<\/p>\n

That said, you don\u2019t want to speculate, Chernoff added. A seller should disclose precisely what is known about the property, nothing more and nothing less, to avoid accidentally misrepresenting a problem.<\/p>\n

If you\u2019re unsure about what to disclose, talk with your real estate agent or your real estate attorney<\/a>. Sometimes an issue isn\u2019t major enough to be written down on a disclosure form but should be relayed to the potential buyer in some fashion, such as an email, Valdez said.<\/p>\n

\u201cFrom my perspective, the more you disclose the better. It\u2019ll make things go smoother,\u201d Valdez said. \u201cYou want to cover yourself to make sure that the buyer doesn\u2019t feel cheated. They know exactly what they\u2019re buying. I think that\u2019s something that helps the seller a lot, even if they have something that\u2019s a little bit of a negative on their property.\u201d<\/p>\n

Again, state laws about real estate disclosures vary, and we\u2019ve gathered the disclosure laws for all 50 states<\/a> so you can see what your state requires. But here\u2019s an overview of eight common real estate disclosures you\u2019re likely to see come up:<\/p>\n

\"Lead-based<\/a>
Source: (Gem & Lauris RK\/ Unsplash)<\/figcaption><\/figure>\n

1) Lead<\/h2>\n

Federal law\u2014the Residential Lead-Based Paint Hazard Reduction Act passed in 1992\u2014requires the disclosure of any lead-based paint<\/a> or chipped paint in any housing built before 1978. Under the law, homebuyers also have a 10-day period to conduct a paint inspection or risk assessment for lead-based paint or related hazards.<\/p>\n

2) Asbestos<\/h2>\n

The health hazards of asbestos are well-known in the workplace; the U.S. Occupational Safety and Health Administration sets standards for asbestos testing and disclosure in work environments.<\/p>\n

Although residential disclosures vary by state, many require disclosures about asbestos on houses built before 1975.<\/p>\n

3) Environmental hazards<\/h2>\n

The Illinois Radon Awareness Act and the Illinois Real Property Disclosure Act, for instance, requires that potential buyers are made aware<\/a> of a property\u2019s levels of radon<\/a>, a colorless, odorless gas that is a leading cause of lung cancer. Many relocation companies and lending institutions also will request radon tests before a home purchase.<\/p>\n

\"Leaky<\/a>
Source (resized): (Massachusetts Dept. of Environmental Protection\/ Flickr<\/a> via Creative Commons Legal Code<\/a>)<\/figcaption><\/figure>\n

4) Natural hazards<\/h2>\n

Flooding issues and plumbing leaks<\/a> are the most common disclosures top real estate agents say they encounter. \u201cThe biggest issue is always the plumbing leaks and the roof issues<\/a> because of the recent hurricane we had last year,\u201d Fonseca said. \u201cA lot of the agents have been helping their buyers and making sure that the roofs are in good, working condition.\u201d<\/p>\n

This area is also where sellers tend to be skittish, Valdez added. \u201cIn Chicago particularly, there are a lot of leaky basements in houses, so a lot of times people are very, very nervous about disclosing that. And often it wasn\u2019t disclosed to them when they purchased the house, so maybe they feel like they don\u2019t have to disclose it to the next buyer.\u201d<\/p>\n

\u201cBut I always advise people to disclose anything and everything, because eventually, it may come back up during the inspection, and if it comes back later, it\u2019s going to be a lot worse for them even after the closing.\u201d<\/p>\n

5) Boundary line disputes<\/h2>\n

Disclosure laws often require sellers to note if any lawsuits about the property\u2019s boundaries have been filed with the city or if they\u2019ve had any disputes regarding the property line.<\/p>\n

Valdez ran across one such dispute the day before closing after his clients, the buyers, chatted with the next-door neighbor. The neighbor had told the homeowner for years that the owner\u2019s fence was on his side of the property, but the neighbor hadn\u2019t filed a formal complaint. \u201cWe were able to work out a credit at closing for that,\u201d he said.<\/p>\n

6) Structural and mechanical issues<\/h2>\n

This applies to defective drywall and structural matters, as well as upgrades and repairs (frequently within the past five years) to the plumbing, electrical system, water softener, built-in appliances, central heating, and other mechanical systems.<\/p>\n

Some buyers also like to know about renovations<\/a> in general. \u201cIf somebody\u2019s fixed up a property, in Chicago, you\u2019re supposed to get permits for just about everything. Unfortunately, Chicago is not the best at enforcing that,\u201d Valdez said. \u201cThat\u2019s one of the things as part of the disclosure that you want to ask: What has been done? What hasn\u2019t been done?\u201d<\/p>\n

\"A<\/a>
Source: (Ian Usher\/ Unsplash)<\/figcaption><\/figure>\n

7) \u201cHaunted\u201d or otherwise stigmatized property<\/h2>\n

Stigmatized property disclosures<\/a> are murky area of disclosure laws, but some states do have laws that require disclosure of a property\u2019s history of \u201cpsychological impact,\u201d such as a murder, suicide, or rumored hauntings that don\u2019t impact the property\u2019s physical condition but still may be considered \u201cmaterial\u201d to a buyer\u2019s decision.<\/p>\n

In California, for example, sellers must disclose any known death on a property within the past three years<\/a>, regardless of the circumstances.<\/p>\n

However, the majority of states do not <\/i>require sellers or their agents to disclose occurrences like homicides, felonies, suicides, or natural deaths that occurred on a property or any rumored paranormal activity associated with it. In states that don\u2019t require disclosure, an agent\u2019s disclosure of sensitive information to the buyers without the seller\u2019s permission may be considered a breach of ethics.<\/p>\n

Fonseca remembered when working in New Jersey years ago that he had to disclose a suicide in a home, which he later sold. In Florida, no such requirement exists, but \u201cif a person asks, of course, we can\u2019t say no.\u201d<\/p>\n

Valdez said that a few times a year, potential buyers will ask him if someone has died on the property. He hasn\u2019t had a seller disclose such an event. However, \u201cwhat I always say is that most of the inventory in Chicago is very old. It\u2019s all from the 1800s or late 1900s. So it\u2019s been a long time and it\u2019s very likely that somebody could have,\u201d he said.<\/p>\n

8) Miscellaneous disclosures<\/h2>\n

From state to state you\u2019ll come across some interesting and seemingly unusual real estate disclosures.<\/p>\n

In 2009, Illinois updated its Residential Real Property Disclosure Act to require that sellers disclose whether someone has been manufacturing methamphetamines<\/a> on the property. The drug is made with a variety of volatile chemicals, which can permeate walls, ceilings, carpeting, and air ducts.<\/p>\n

The state also has a particular disclosure for condominiums that outlines any upcoming projects with special assessments.<\/p>\n

Florida has a similar addendum about the requirements of condominium and homeowners\u2019 associations, which outlines the fees, among other particulars. \u201cIf you don\u2019t provide a condo disclosure to a potential buyer, and they find out that there\u2019s an association, they don\u2019t have to follow through with the contract if you didn\u2019t give them the documents that go along with the property,\u201d Fonseca said.<\/p>\n

Information in this blog post is meant to be used as a helpful guide, not legal advice. If you need legal help with a disclosure rule in your state, please consult a skilled real estate lawyer.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

When in doubt, agents advise you to disclose, disclose, disclose. Let\u2019s get into some of the more common disclosures in real property transactions and how they apply to your home sale.<\/p>\n","protected":false},"author":76,"featured_media":7032,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[243,322],"tags":[],"class_list":["post-7030","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-contracts","category-logistics"],"acf":[],"yoast_head":"\n8 Types of Disclosures Common in Real Property Transactions<\/title>\n<meta name=\"description\" content=\"When in doubt, agents advise you to disclose, disclose, disclose. 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