Disclosure Law
Seller Disclosure: What Has to Be Revealed, and by Whom
The disclosure form, the deadline for delivering it, the conditions it asks about, any exemptions for estates or foreclosures, and the rules on stigmatized property are all set by state statute and amended regularly. Work from your own commission's current form and statute, not from a national list.
Disclosure sits at the intersection of contract law, agency duty and license law, which is why it appears on all three parts of an exam outline rather than in one tidy chapter.
The structure is consistent even though the forms are not. Federal law imposes a short list of duties everywhere. State statute adds a written form and defines what has to go on it. Agency law imposes a separate duty on the licensee that does not depend on what the seller chose to write down.
The Duty and Where Its Edges Are
Start with the test that decides everything else. A fact is material when a reasonable buyer would weigh it in deciding whether to buy or what to pay. The standard is objective. It does not turn on whether this buyer asked, whether the seller found the condition important, or whether anybody thought to put a line for it on the form.
Two limits follow from the phrasing. The duty reaches conditions the seller knows about, so a genuinely unknown defect is generally not a disclosure violation, though active concealment or a misleading half-answer is. And the duty is about facts rather than opinions: a cracked slab is a fact, while an assessment of whether the neighborhood is improving is not.
Material facts are a wider category than physical defects, and this distinction is examined constantly. A recorded easement, an assessment about to be levied, unpermitted work, boundary uncertainty, litigation touching the property, or an approved development that will change what the back windows look at may all bear on a purchase decision without anything being broken.
Selling in present condition does not switch the duty off. That kind of clause allocates the cost of repairs; it does not license silence about what the seller knows. The buyer accepts the property as it is, which presupposes being told what it is. Jurisdictions differ on whether some sales can be conducted without a form at all, which is a separate question from whether known defects may be concealed.
Federal Duties That Reach Every Jurisdiction
A handful of obligations come from federal law and therefore apply regardless of what your state form says.
Lead-based paint. For most residential housing constructed before 1978, the seller must disclose known lead paint and hazards, hand over records and reports in hand, provide the required federal pamphlet, and give the buyer an opportunity to conduct an assessment unless that opportunity is waived in writing. The disclosure is attached to the contract and signed.
Fair housing constraints on what you volunteer. Disclosure duties never authorize comments on the makeup of a neighborhood. Questions about who lives in an area are answered by pointing the buyer to public data sources, not by characterizing the area.
Flood risk information. Federal flood mapping and federally backed lending drive disclosure and notice obligations, and a number of states have layered their own flood history requirements on top. Whether a written statement is required from the seller is decided locally.
Offender registry notice. Federal law created the registries; the obligation to notify, when it exists, is written into state law, and several states expressly place the burden on the buyer to consult the registry themselves. Never characterize registry contents on a buyer's behalf.
Proximity notices. Airports, military installations, agricultural operations and similar neighbors carry notice requirements in some jurisdictions. These are creatures of state law, so confirm rather than assume.
What the State Form Typically Reaches
Forms differ in wording and length, but the categories they work through are broadly consistent. Expect items on all of these.
Structure and envelope. Foundation, framing, roof covering and age, exterior walls, windows and any history of water entering the building.
Systems. Plumbing supply and drainage, electrical service and panel, heating and cooling, water heater, well and septic where applicable, and whether any component is known to be at the end of its service life.
Environmental conditions. Lead, asbestos, radon, mold, methamphetamine contamination, storage tanks above or below ground, and soil or drainage problems.
Pests and biological damage. Termites and other wood-destroying organisms, previous treatment, and repairs made to damage they caused.
Legal and title matters. Easements, encroachments, boundary disputes, liens and assessments, code enforcement actions, unpermitted improvements, and litigation affecting the property.
Association matters. Governing documents, dues and special assessments, restrictions on use, and pending association litigation where a community association governs the property.
Insurance and loss history. Past claims, damage from fire, flood or storm, and repairs made after such an event.
Disclosure Questions Exams Return To
How do defects and material facts differ?
A defect is a problem with the property itself. A material fact is anything that would bear on a reasonable buyer's decision, which includes every known defect and a good deal more: easements, pending assessments, unpermitted additions, a planned road widening. Exam items that describe something outside the property line are usually checking whether you treat the two words as interchangeable, and they are not.
Does the licensee owe a duty independent of the seller?
Yes, and this is the single most tested point on the topic. A licensee who knows a material fact generally must disclose it whether or not the seller put it on the form, and a licensee cannot help a client conceal one. Confidentiality owed to a client covers the client's bargaining position, never known defects in the property. A licensee who stays quiet risks regulatory discipline and personal civil exposure.
Is a licensee expected to inspect the property?
The baseline duty is honesty about what is known and not papering over what is plainly visible. Several jurisdictions go further and require a reasonably competent visual inspection of accessible areas, with the results disclosed. Neither version turns the licensee into an inspector, and the correct advice to a buyer is always to obtain an independent professional inspection.
What follows a failure to disclose?
Several things at once, potentially. The buyer may have grounds to cancel before closing or to sue for damages afterward, the regulator may discipline any licensee involved, and deliberate concealment can support a fraud claim with heavier remedies than an ordinary contract action. Limitation periods and available remedies are defined by state law.
What about deaths or other events at the property?
This is governed entirely by state statute and the answers genuinely conflict. Some jurisdictions expressly declare such events non-material and shield the seller and licensee from liability for not mentioning them; others require disclosure in defined circumstances. Health privacy law constrains what may be said about occupants in every state. On the state portion, answer from your own statute and nothing else.