What You Need to Know About Real Estate Disclosures


Whether you’re thinking about selling your home or buying one, it’s important to understand the role of real estate disclosures. For instance, what about that roof leak you had repaired last year? Or as the buyer, what if the seller is trying to hide a roof leak that happened last year? Real estate disclosures are designed to keep the seller and the buyer on the same page as it relates to any structural defects a real estate property may currently have or could likely have in the near future.

Why are disclosures important?

Real estate disclosures serve to protect both the buyer and seller.

  • They protect the buyer from being duped about expensive repair projects they may face soon after buying a home.
  • They also protect the seller from future legal actions.

At the basic level, a real estate disclosure is the seller’s chance to reveal anything that negatively affects the value, enjoyment, or usefulness of the real property.

What type of information does a seller need to disclose?

Types of disclosures a seller needs to disclose can vary widely. This is based on the home’s location, homeowner’s association bylaws, the age of the home, and multiple other factors. However, typical disclosures include things like:

  • Previous improvements
  • Upgrades
  • Renovations
  • Whether any work was done without obtaining a permit.

It’s important that buyers always cross reference a seller’s disclosure statement with city building permits and zoning reports.

Other standard disclosures include:

  • Current or past pest issues and treatments
  • The existence of pets
  • Neighborhood nuisances
  • Defects with major appliances or home systems
  • History of property line disputes.

In addition, disclosure documents from the seller will often show if they are involved in bankruptcy proceedings and whether there are any liens on the property.

Are disclosures imposed by both state and federal bodies?

While real estate disclosures primarily fall under state jurisdiction and vary from state to state, there are a few federally mandated disclosures as well. An experienced real estate agent should be well-versed in your state’s disclosure laws. The only federal regulation regarding real estate disclosures pertains to the presence of lead paint, but a failure to disclose this information can cause the purchase contract to be null and void even after the successful execution and closing of escrow. In most scenarios, a case will be opened in the courts to adjudicate the complaint. Substantial damages can be incurred by the violating party as we have outlined below.

Requirements and Penalties are:

  • Any home built before 1978 requires a lead paint disclosure.
  • Seller will be legally required to include warning language in the real estate contract if they know there is lead paint in the home.
  • Sellers must also give buyers 10 days to test for lead paint prior to closing.
  • If a seller fails to disclose the presence of lead paint, they can be held liable for up to a decade.
  • Sellers can also be sued for up to triple the costs of damages suffered.

What are the consequences of failing to disclose?

It’s important that both the seller and the buyer take real estate disclosures seriously, as they protect both parties. A lack of conscientiousness with a disclosure can mean a seller has to pay for damages suffered, including medical bills, or paying for repairs to the property related to a known defect. Therefore, the best protection for the seller is to err on the side of caution and disclose anything and everything, no matter how minor it may seem. In addition, the seller should provide all available receipts to the buyer that itemize how any issues were corrected.

What are the buyer’s options if they find a problem?

If you’re the buyer in a real estate transaction and you run into an issue with structure or otherwise, you must let your real estate agent know right away. Your agent’s job is to communicate and mitigate issues associated with the successful transaction of your property purchase. They will know the correct individuals to speak with and can map out a solution to the problem, so that a successful closing can still be accomplished.

However, if you have already executed your contracts and settled the details in closing, anything missed may be handled by the courts in the aftermath. The courts will then review the details of the case and determine who, if any, is responsible for either the lack of transparency or lack of diligent work that could have avoided the problem.

If you had a property inspector review the home prior to purchasing, most serious issues should have been located. However, from time to time, it may be the case that something is overlooked. Maybe an item that is not normally inspected. Hopefully, by this point, the disclosures could have already protected both parties from any hardship.

If you’re looking to purchase a home in Florida, call your local real estate company and ask about Florida’s homebuyer assistance programs. Like most of this article, disclosures will be provided for these special programs so be sure to review them all thoroughly.


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