Disclosure statements used in real estate transactions are called sellers property disclosure statements. Usually, a real estate disclosure statement will be enclosed within the transaction document and the parties need not sign a separate disclosure document. In real estate disclosure, a seller has to disclose to a buyer the latent defects in the property. A latent defect is a defect in a property that cannot be noticed with a reasonable inspection. However, sellers need not disclose patent defects in property disclosures. Patent defects are defects that can be detected by normal inspection.
A residential disclosure statement is a disclosure statement made by a home seller to a buyer while selling a home. A home seller disclosure statement should contain all identified issues with the property and other relevant property information, like faulty wiring and presence of lead based paint. Property seller disclosure house forms disclose honest and accurate information about problems related to the house.
Some states like California require sellers to give buyers a natural hazard disclosure statement when the property to be sold lies within hazardous areas, such as flood zones, earthquake fault zones, or fire zones. Lead based paint disclosure statutes require home owners to disclose the presence of lead-based paint in the property to prospective buyers or tenants. In some jurisdictions, certain transactions like transfer between relatives or a foreclosure sale are exempt from the duty of providing seller disclosure statements.
A seller who provides false information through property disclosure statements can be prosecuted for misrepresentation. No sellers disclosure when required may lead to civil damages. If the seller fails to provide a copy of the house disclosure statement to the buyer, some jurisdictions allow buyers to rescind a transaction.
For proper disclosure, houses aren't required to have every flaw described on sellers disclosure statements. A well-drafted seller's disclosure form will disclose all the material defects in a property and relieve sellers from liability. Some of the property information required in a home disclosure form includes:
- known defects
- easements or encroachments on the property
- presence of lead paint or other toxins
- floodplain or wetland classification