ABA Family Legal Guide

Buying and Selling a Home

The Steps of Buying and Selling a Home

Disclosures

What is the seller obligated to disclose to the buyer?

Disclosure is generally addressed by state law, and requirements vary among the states. Because this is an area of law that is rapidly changing, it is important to review your state's requirements before selling.

Some states require sellers to fill out a long form that explicitly asks about the seller's knowledge of various significant or material defects that might be present in the home. For example, the form might ask whether the seller is aware of any material defects in the basement, leaks in the roof, or unsafe concentrations of radon gas. Another form might specifically question the condition of various parts of the home, such as the age of the roof, and whether the home contained insulation or lead paint. In other states, sellers are not required to fill out disclosure forms, but are required to disclose any defects in equipment that should be functioning at the time of sale, such as the furnace, central air-conditioning, the hot-water heater, and so on.

As a seller, you may want to disclose known material defects that seriously affect the home's value even if your state does not mandate such disclosure. This will help avoid future legal problems involved with the sale of your home. Many of the lawsuits filed involving real estate transactions allege the seller's misrepresentation or failure to disclose. Responding honestly to the buyer's questions and either repairing material defects or disclosing them is an effective way to avoid future litigation.