What Is a Property Disclosure Statement?
Throughout most states, when a property is sold, it is the seller’s responsibility to complete a Property Disclosure Statement. This notifies the buyer of any potential negative aspects of the property such as damages or defaults to the property, whether it is at risk of fires or floods, if it is near a military base, or if it ever housed illegal activities.
- Seller's Property Disclosure Statement;
- Property Condition Disclosure Statement;
- Seller’s Disclosure Statement.
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Once a Property Condition Disclosure Statement is completed it must be turned over to the buyer before the purchase is finalized so the buyer is well aware of any possible risks of the purchase.
Property Disclosure Statements by State
Depending on the state, a real property disclosure statement may or may not be required for the seller to complete. Below is a state-by-state breakdown of the rules and notes if additional documents are required.
Property Condition Disclosure Statement - How-to Guide
To create a Seller’s Property Disclosure Statement you will want to fill out a document with the following information:
- Name of the seller and location of the property for sale;
- Statement of Notice to Seller that lists out what the purpose of the seller’s disclosure statement entails and who will be relying on the information to complete the sale;
- Statement of Notice to Buyer that details the Seller’s most accurate knowledge of the information presented is accurate and truthful. Also, note that a property disclosure statement does not a substitute for an inspection conducted by a licensed inspector;
- Signature section for buyer’s initials to signify they understand the information described above.
Then you will want to fill out the section for each of the following categories:
- Ownership section that lists the property type, year built, length of the current ownership, if the property has been accurately surveyed, and dates the property was occupied;
- Water supply - the type of water delivery process (such as by public entity, well, etc);
- Sewage disposal and Plumbing System - does the property use a septic tank or public sewage service;
- Heating, Air Conditioning, and Hot Water - i.e. oil, electric, propane, natural gas, etc;
- Foundation - describe any settlement issues with the property;
- Basement/Crawlspace/Cellar/Roof - list any leaks, moisture, or damage;
- Electric Systems - list any known issues;
- Insulation - location and any known issues;
- Is a carbon monoxide alarm located on the property;
- Any hazardous or unregulated materials located on the property;
- Fire/Flood Zone;
- Any improvements made to the property;
- If a suicide or murder has ever happened on the property;
- Material or Structural Systems defects.
Include a final signature section on the bottom for the buyer and seller with the date of sale.
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