A seller in Indianapolis delivers the Indiana Seller's Residential Real Estate Sales Disclosure Form to the buyer on Tuesday. The seller accepts the buyer's offer on Thursday. The buyer does not rescind within 2 business days. Later, the seller discovers a new water leak in the basement that occurred after the disclosure form was delivered but before closing. The seller's broker argues no updated disclosure is needed because the form was already delivered and the rescission period has passed. Which statement best reflects Indiana law in this situation?
Correct Answer
B) The seller must deliver an amended disclosure form reflecting the new defect, and the buyer's 2-business-day rescission right is triggered again from receipt of the amendment
Under IC 32-21-5, if a seller discovers a new material defect after delivering the disclosure form but before closing, the seller has a duty to amend the disclosure form and deliver the amendment to the buyer. Upon receiving the amended disclosure, the buyer's 2-business-day rescission right is re-triggered from the date of receipt of the amendment. This continuing disclosure obligation ensures buyers have accurate information throughout the transaction, not just at the initial disclosure date.
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Related Topics & Key Terms
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Related Concepts
HOA disclosure requires informing buyers about the existence, rules, fees, financial health, and restrictions of a homeowners association governing the property. This information helps buyers understand their obligations before purchase.
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."
A material defect is a condition that significantly affects the value, desirability, or safety of a property and that would likely influence a reasonable buyer's decision to purchase or the price they would pay.
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