What Are Home Owners Required to Disclose When Selling a House?

Disclosure requirements vary widely by state.
i BananaStock/BananaStock/Getty Images

Real estate agents love throwing around phrases like “curb appeal” and “staging,” concepts focused on steps that sellers may take to make their homes more appealing to prospective buyers. While cosmetic improvements may help you find a buyer, real estate disclosure laws require homeowners to provide information about the property to potential sellers. These laws vary by state, but you’re likely to be required to come clean about your home’s shortcomings -- even if you've dressed them up.

Federal Lead Paint Disclosure

The Environmental Protection Agency requires that homeowners who sell buildings built before 1978 provide a disclosure statement about lead paint or lead-paint hazards in the home to potential sellers. Sellers must also give potential buyers an EPA-produced pamphlet about the effects of lead poisoning. In addition, contracts must contain a lead warning statement that certifying that the seller has provided disclosure about environmental hazards.

State Laws

Only three states -- Alabama, West Virginia and Wyoming -- don't have laws that require some form of property disclosure by a seller, according to Fox News. Because requirements vary between states, there isn’t a one-size-fits-all guide to property disclosure laws, but most states require disclosure of major problems with the property. You usually must report to any potential buyers leaky roofs, bad wiring, mold, flooding basements, pests -- such as termites -- and problems with heating and plumbing systems.

Local Hazards

State disclosure laws often reflect hazards that may be unique to homeowners in that region. For example, homeowners in California and Oregon must provide information about earthquake hazards, while Alaska requires homeowners to notify potential buyers if their home has ever been damaged in an avalanche. Hawaii’s sellers are responsible for notifying buyers about erosion from volcanic activity, while their counterparts in the dry Western states are on the hook to tell buyers about wildfire hazards. You’ll need to review your state's laws to determine what types of regional phenomenon about which you must give buyers a heads-up.

Stigmatized Homes

A handful of states require you to notify buyers about unusual issues that have nothing to do with the actual condition of the home. If your home has been the site of a suicide, a homicide or other criminal activity, you may need to provide notice to buyers. Your requirements vary significantly by state. California sellers only have to disclose murders or other misdeeds that occurred three years prior to sale. Sellers in Connecticut, Delaware, New Hampshire, North Dakota and Oklahoma aren’t required to actively notify sellers of a home’s storied past, but must spill the gory details if a buyer asks.

the nest