Seller Disclosure Requirements

1. Federal Disclosure Requirements

The following disclosures are required by federal law for all residential home sales in the United States, regardless of state.

1.1 Lead-Based Paint Disclosure (Pre-1978 Homes)

Under the Residential Lead-Based Paint Hazard Reduction Act of 1992 (Title X, Section 1018), sellers of residential properties built before 1978 must:

• Disclose known lead-based paint and lead-based paint hazards in the property
• Provide buyers with any available reports or records on lead-based paint in the property
• Provide buyers with the EPA pamphlet "Protect Your Family From Lead in Your Home"
• Include a specific "Lead Warning Statement" in the purchase agreement
• Allow buyers a 10-day period to conduct a lead-based paint inspection (buyers may waive this right)
• Retain all signed acknowledgments and disclosures for at least 3 years

Penalties: Failure to comply can result in civil penalties of up to $19,507 per violation, treble damages in private lawsuits, and criminal penalties including imprisonment.

Exemptions: Properties built in 1978 or later, housing for the elderly (unless children reside there), zero-bedroom units (studios, dormitories), short-term vacation rentals of 100 days or less, and foreclosure sales.

1.2 FIRPTA Withholding (Foreign Sellers)

Under the Foreign Investment in Real Property Tax Act (FIRPTA), if the seller is a foreign person, the buyer is generally required to withhold 15% of the sale price and remit it to the IRS. Sellers who are U.S. citizens or residents should be prepared to certify their status via IRS Form W-9 or a FIRPTA affidavit.

2. State Property Condition Disclosures

Almost every U.S. state requires sellers to complete a written property condition disclosure form. While specific requirements vary by state, sellers are generally required to disclose:

2.1 Structural and Physical Condition

• Foundation issues (cracks, settling, water intrusion)
• Roof condition and age, known leaks
• Plumbing system condition (pipes, water heater, sewer/septic)
• Electrical system condition (wiring type, panel capacity)
• HVAC system condition and age
• Insulation and weatherproofing
• Windows and doors condition
• Structural modifications or additions (with or without permits)

2.2 Environmental Hazards

• Asbestos
• Radon gas
• Mold or mildew
• Underground storage tanks
• Soil contamination
• Proximity to waste sites or industrial facilities
• Flood zone location and flooding history
• Natural hazard zones (earthquake, wildfire, landslide)

2.3 Legal and Regulatory Issues

• Property line disputes or encroachments
• Easements, rights-of-way, and shared access
• Pending or past litigation related to the property
• HOA membership, fees, rules, and pending assessments
• Zoning violations or non-conforming use
• Code violations (current or past)
• Insurance claims history
• Special taxing districts (MUD, PID, etc.)

2.4 Other Material Facts

• Deaths on the property (required in some states)
• Known paranormal activity (required in some states)
• Neighborhood nuisances (noise, odor, traffic)
• Registered sex offenders in the area (Megan's Law)
• Past use as a methamphetamine lab
• Pest infestations (termites, rodents, bedbugs)
• Water quality issues
• Shared walls, driveways, or fences

3. State-Specific Requirements

Below is a summary of notable disclosure requirements in high-volume states. This is not exhaustive — consult a local attorney for complete requirements.

3.1 California

• Transfer Disclosure Statement (TDS) — required for most residential sales
• Natural Hazard Disclosure Statement (earthquake fault zones, flood zones, fire hazard areas)
• Mello-Roos and supplemental tax disclosures
• Megan's Law database notice
• Smoke detector, carbon monoxide detector, and water heater strapping compliance
• Mold disclosure
• Military ordnance and former federal/state ordinance locations
• Local rent control and just cause eviction disclosures (if applicable)

3.2 Texas

• Seller's Disclosure Notice (statutory form)
• MUD (Municipal Utility District) disclosure
• Property tax and assessment disclosures
• Previous structural repairs disclosure
• Annexation and ETJ (Extraterritorial Jurisdiction) notices

3.3 Florida

• Radon gas disclosure (statutory language required)
• Coastal erosion and beach nourishment disclosures
• HOA and condominium association disclosure requirements
• Energy efficiency rating disclosure
• Sinkhole disclosure
• Building permit and code violation history

3.4 New York

• Property Condition Disclosure Statement (PCDS) — or $500 credit to buyer at closing
• Lead paint disclosure (federal)
• Bedbug infestation history
• Attorney involvement required at closing

3.5 Illinois

• Residential Real Property Disclosure Report
• Radon awareness statement
• Mold disclosure
• Attorney required at closing

3.6 Colorado

• Seller's Property Disclosure form
• Square footage disclaimer (measurement methods vary)
• Inclusion/exclusion of fixtures and personal property
• Green disclosures for energy-efficient features

3.7 Georgia

• Seller's Property Disclosure Statement
• Lead paint disclosure (federal)
• Attorney required at closing
• Flood zone disclosure

3.8 "Caveat Emptor" States

A small number of states follow "caveat emptor" (buyer beware) principles with minimal mandatory disclosure requirements. However, even in these states, sellers may not actively conceal known defects and must respond truthfully to direct questions. States with limited disclosure requirements include Alabama, Arkansas, and Wyoming, among others.

4. How Varden Helps With Disclosures

Varden provides the following tools to assist sellers with their disclosure obligations:

• State-specific disclosure templates: Pre-formatted forms based on your property's state
• Guided questionnaire: Step-by-step prompts to help you identify items that may need disclosure
• Lead paint disclosure form: Federal EPA-compliant lead-based paint disclosure and acknowledgment
• Digital signatures: Electronic signing for all disclosure documents
• Document storage: Secure storage of signed disclosures with audit trails

5. Consequences of Non-Disclosure

Failing to disclose known material defects can result in serious legal consequences:

• Rescission: Buyers may be able to cancel the sale and recover all costs
• Damages: Courts may award buyers the cost of repairs, diminution in property value, and consequential damages
• Fraud claims: Intentional concealment can result in punitive damages and criminal fraud charges
• Federal penalties: Failure to disclose lead paint carries penalties up to $19,507 per violation plus treble damages
• Legal fees: In many states, the prevailing party in a disclosure lawsuit can recover attorney fees

6. Best Practices for Sellers

• Disclose everything you know. When in doubt, disclose it. Over-disclosure is always safer than under-disclosure.
• Be honest and specific. Vague or evasive answers can be treated as concealment.
• Get a pre-listing inspection. A professional inspection can identify issues you may not be aware of and demonstrates good faith.
• Keep records. Maintain copies of all repairs, renovations, permits, and inspections.
• Consult an attorney. A real estate attorney can review your disclosures for completeness and compliance with local law.
• Update disclosures. If you become aware of new issues after initial disclosure, provide an updated disclosure to the buyer.
• Don't rely solely on templates. Our templates cover common items but may not address every disclosure requirement in your jurisdiction.

7. Documents Needed to Sell Your Property

In addition to disclosures, sellers should gather the following documents before listing:

7.1 Property Documents

• Property deed (to confirm ownership and legal description)
• Survey or plat map
• Property tax records and most recent tax bill
• Mortgage payoff statement (if applicable)
• Title insurance policy from when you purchased
• HOA documents: CC&Rs, bylaws, meeting minutes, financial statements, special assessments

7.2 Improvement and Repair Records

• Building permits for any renovations or additions
• Receipts and warranties for major repairs (roof, HVAC, plumbing, electrical)
• Appliance manuals and warranties
• Certificates of occupancy (if additions were made)
• Inspection reports (home inspection, pest, radon, mold, etc.)

7.3 Insurance and Utility Records

• Homeowner's insurance policy and claims history (CLUE report)
• Flood insurance policy (if in a flood zone)
• Utility bills (12 months of electric, gas, water, sewer)
• Home warranty information (if transferable)

7.4 Legal Documents

• Completed property condition disclosure form (state-specific)
• Lead-based paint disclosure (pre-1978 homes)
• Any existing contracts, leases, or agreements affecting the property
• Divorce decree or court order (if applicable to ownership)
• Power of attorney (if someone else will sign on your behalf)
• Trust documents (if property is held in a trust)
• Death certificate (if property is part of an estate)

8. Contact Us

For questions about disclosure requirements or our disclosure tools: