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Mandated Disclosures

Seller's Disclosure Statement

A seller's disclosure statement is a form that sellers complete to inform buyers about the condition and history of the property, including known defects, past repairs, insurance claims, and environmental issues.

Understanding Seller's Disclosure Statement

This document is required in most states and covers a wide range of property conditions. It typically asks about structural issues, water damage, pest problems, neighborhood nuisances, HOA information, utility problems, and legal disputes affecting the property. The seller signs the form attesting that the information is accurate to the best of their knowledge. Real estate agents should not complete the form for the seller, as the seller is the one with personal knowledge of the property.

Real-World Example

A seller's disclosure form asks whether the property has ever had water damage. The seller knows the basement flooded three years ago and was repaired. The seller must disclose this history even though the problem has been fixed, because the question asks about past occurrences, not just current conditions.

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Exam Tips

The seller—not the agent—should complete the disclosure form. Past problems must be disclosed even if they have been repaired. Agents should review the form for completeness but should not fill it out on behalf of the seller. Some states require the form to be provided before an offer is accepted.

Related Terms

Property Condition DisclosureMaterial DefectLead-Based Paint Disclosure

Related Concepts

Fair housing laws apply to a broad range of activities related to housing, including sale, rental, financing, and advertising.

Protected classes are groups of people who are legally shielded from discrimination based on specific characteristics.

Violating fair housing laws can lead to significant penalties, including fines, civil liability, and professional discipline.

Many states and localities have fair housing laws that expand upon the protections offered by the federal Fair Housing Act.

The Lead-Based Paint Disclosure is a federally mandated disclosure required for all residential properties built before 1978. Sellers and landlords must disclose known lead-based paint hazards and provide the EPA pamphlet "Protect Your Family From Lead in Your Home."

Frequently Asked Questions

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