What are real estate disclosures?

Disclosure requirements for selling a home

Real estate disclosures are information about a home that sellers are required to give to buyers by law. These disclosures can include problems that require significant repairs, liens on the house, HOA rules affecting the property, and nearby nuisances.

Disclosure requirements vary by state and local communities which may have additional requirements as well. Before you buy or sell a home, make sure you understand the real estate disclosure laws that affect you!

What are common real estate disclosures?

Most states have laws that require sellers to disclose issues that might influence a buyer’s decision to purchase a home. Common disclosures include:

• Encumbrances. These include questions about the legal ownership of the property, financial claims or liens on the home, disputes over property lines, and other issues.
• Damage, hazards, and faulty systems. These include structural issues with the foundation or roof; damage from water and pests; hazards such as radon, asbestos, or lead paint; and problems with plumbing or electrical systems.
• Property repair history. Sellers are often required to disclose significant repairs they’ve made to a home, even when they believe those repairs have fixed the problem.
• HOA or condominium fees and regulations. If the property is part of a homeowners or condo association, the seller needs to disclose the HOA fees and restrictive covenants. If the seller is aware of an upcoming special assessment in addition to the normal fees, they must disclose this as well.
• Local nuisances. If the home is located close to a facility that creates noise (such as an airport or bar), a business that creates smells (such as a farm or chemical plant) or other nuisances, sellers may be required to disclose this information.
• Deaths and crimes. Some states may require sellers to disclose whether deaths or criminal activities occurred in the house.
• Inclusions and exclusions. These disclosures relate to fixtures, appliances, furniture, and personal property the seller is including or excluding from the sale of the home.

Because disclosure requirements can vary from state to state, and community to community, it’s a good idea to research the laws that affect your house. Real estate agents typically understand what’s required and can help you make the right disclosures. You can also research state laws through Nolo.com, a DIY legal guide.

What is a real estate disclosure form?

Many states have real estate disclosure forms you can find online. These forms can help you make the required disclosures for your home. Your real estate agent can help you complete this form as well.

In general, you don’t need to hire a construction expert or professional appraiser to complete the disclosure form. Instead, you are expected to share information you have from owning the home as well as information you may have received from the previous owner.

What is the caveat emptor rule?

A few states do not have many disclosure requirements. The laws are mostly “caveat emptor” in these states, which is Latin for "let the buyer beware." When buying a home in a caveat emptor state, you’ll want to be sure to ask the seller questions about the condition of the home and get an inspection.

What happens if you don’t make required real estate disclosures?

It’s possible for home sellers to face lawsuits when they don’t make disclosures required by the law. These suits may seek to recover the cost of repairs and attorney fees. It’s also possible for the buyer to seek to cancel the sale and recover the purchase price of the home.

Generally speaking, the buyer needs to prove that the seller deliberately failed to disclose a significant problem or actively tried to hide it for these types of lawsuits to succeed.

Can real estate disclosures replace a home inspection?

Laws typically require homeowners to disclose material defects—that is, major problems which could significantly reduce the value of the home, require significant repairs, or place the health and safety of its occupants at risk.

Disclosure laws may not require sellers to reveal other important information that a home inspection would. For example, an inspection might reveal that a working HVAC system is old and will likely need replacing, or that a home has old windows which will make heating and cooling more expensive.

This is information that might influence your decision to buy a home or how much you offer to pay for it. As a result, consider getting a home inspection in addition to reviewing the seller’s disclosures.

Last reviewed and updated January 2024 by Freedom Mortgage Corporation.