Property Disclosures
Sellers and licensees must reveal known material facts about a property. This topic covers the duty to disclose, the federal disclosures that apply nationwide, and the difference between defects a buyer can and cannot discover on their own.
The Duty to Disclose Material Facts
A material fact is one that could affect a reasonable buyer's decision or the property's value or desirability. Sellers and their agents must disclose known material defects; failing to do so, or actively concealing them, can be misrepresentation or fraud. This modern duty limits the old rule of caveat emptor ('let the buyer beware'). Puffing (opinion-based sales talk like 'the best view in town') is legal, but stating a false fact is not.
Latent vs. Patent Defects
A patent defect is obvious or readily observable on ordinary inspection, so the buyer is expected to notice it. A latent defect is hidden and not discoverable by normal inspection, such as a cracked foundation behind a finished wall or a basement that floods seasonally. A seller or agent who knows of a latent material defect must disclose it, because the buyer has no way to find it independently.
Federally Required Disclosures
Federal law requires a lead-based paint disclosure for most residential housing built before 1978: the seller or landlord must reveal known lead hazards, provide records, deliver the EPA pamphlet, and give buyers a ten-day period to test. Other disclosures, such as those for a property in a special flood hazard area or for certain environmental hazards, may apply depending on the situation. Many states add their own required disclosure forms, but the pre-1978 lead rule is nationwide.