Seller Disclosure Duties

What a seller of a home must tell a buyer about the property - known material defects, water intrusion, structural and system problems, and under federal law lead-based paint - the state disclosure forms, the "as is" sale, and what a buyer can do when a problem was concealed.

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What it means

The old rule was that a buyer took a property with whatever defects a reasonable inspection would reveal and the seller need say nothing. Every state has moved away from it. Most now require a seller of residential property to complete a statutory disclosure form before the contract is signed, answering questions about the roof, foundation, plumbing, electrical and heating systems, water damage and flooding, pests, environmental hazards, boundary disputes, additions built without permits, and whether the property is in a homeowners' association or a flood zone. The form asks what the seller actually knows; a seller is not required to inspect or to guarantee the property's condition, but is required to answer honestly and to update an answer that becomes untrue before closing.

Independently of the form, the common law in nearly every state makes a seller liable for fraudulent concealment of a known material defect that the buyer could not reasonably discover - a basement that floods every spring behind fresh paint, a foundation crack behind new paneling - and for a misrepresentation the buyer relied on. Real-estate agents carry their own duty to disclose material facts they know. A few categories are excluded from disclosure in many states: that a death, a crime or an alleged haunting occurred on the property, or that a prior occupant had a particular illness. Some states permit an "as is" sale to limit the seller's liability for the property's condition, but no state reads "as is" to license active concealment or a false answer on the form.

Federal law adds one requirement for any housing built before a stated year: the seller must disclose known lead-based paint and lead hazards, provide the federal pamphlet and any reports, and give the buyer a period to conduct a lead inspection, with the disclosure recorded in a signed attachment to the contract. A buyer who discovers a concealed defect after closing may rescind the sale in some circumstances, or more commonly sue for the cost of repair or the loss in value, and the state form usually sets its own limitation period for those claims.

Where this comes from

When people hire a lawyer for this

A buyer who finds a defect the seller must have known about should photograph everything, stop any repair that would destroy the evidence, get a contractor's written opinion on cause and age, and see a lawyer before contacting the seller - the claim depends on proving knowledge and concealment, and the disclosure form, the listing and the inspection report are the exhibits. A seller filling in the form should over-disclose: an honest answer about a repaired problem is a defense, and a blank or a "no" about a known one is the whole of the plaintiff's case.

Worried about the cost? A lawyer can be hired for one part of a case only (limited-scope representation), may be paid from what a claim recovers (contingency fee), or may be free through a pro bono program or legal aid; a court can also waive its own filing fees.

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Related terms

Other entries in the same area of law, each written from the same primary sources.

• Adverse PossessionThe doctrine by which a person who occupies land they do not own, openly and continuously for the period the state sets, becomes its owner - the elements, the "color of title" and tax-payment variations, and why it decides fence and driveway disputes far more often than it transfers whole parcels.
• Deed Types: Warranty, Special Warranty and QuitclaimWhat the different forms of deed promise about the title they convey - the general warranty deed's guarantee against every defect, the special warranty deed's narrower one, and the quitclaim deed's none - and what each is used for.
• EasementA legal right to use someone else's land for a defined purpose, without owning it.
• Eviction (Unlawful Detainer)The court process a landlord must use to make a tenant leave - and in most states, the only lawful way to do it.
• Foreclosure (Judicial and Non-Judicial)The process by which a mortgage lender takes and sells a home after default - the court-supervised route some states require and the trustee's sale others permit, the federal servicing rules that must be followed first, the loss-mitigation alternatives, and what the borrower can still owe or reclaim after the sale.
• HOA Covenants and Assessment LiensThe recorded restrictions that bind every owner in a planned community or condominium, the association that enforces them, and the assessment lien that lets it foreclose on a home for unpaid dues - what the documents control, how they are amended and enforced, and the limits the states have placed on association power.
• Homeowners Insurance ClaimHow a property loss claim actually works - what the policy covers, the duties it imposes on you, and where claims most often fail.
• Implied Warranty of HabitabilityA landlord's obligation to keep a rented home fit to live in - one the lease usually cannot sign away.
• Mechanic's Lien (Construction Lien)The statutory lien a contractor, subcontractor, supplier or laborer may record against a property for unpaid work or materials - the preliminary notices and filing deadlines that make or break it, why an owner who paid the general contractor can still face a subcontractor's lien, and how the lien is enforced or released.
• Purchase Contract ContingenciesThe conditions in a home-purchase agreement that let a buyer walk away with the deposit - inspection, financing, appraisal, sale of the buyer's current home, title - how each is exercised and waived, and what happens to the earnest money when the deal fails.
• Quiet Title ActionThe lawsuit that asks a court to declare who owns a property and to remove a competing claim from the record - used to clear an old mortgage never released, a break in the chain of title, a tax-sale or adverse-possession claim, or a deed that should never have been recorded.
• Security DepositMoney a tenant leaves with a landlord against damage or unpaid rent - held under state rules that usually require an itemized accounting within a fixed period after move-out.
• Title Search and Title InsuranceThe examination of public records that establishes who owns a property and what claims stand against it, and the insurance policy that pays if that examination missed something - who is protected by the lender's policy, who by the owner's, and what neither covers.
• Transfer-on-Death DeedA recorded deed that leaves a house to someone at death while changing nothing during life - available in many states, and not all.

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