Disclosures and Environmental Issues
Buyers rely on accurate disclosure of material facts and environmental hazards to make informed decisions. This chapter covers federal disclosure duties and Arizona-specific disclosure tools, along with common environmental concerns.
Material Fact and Federal Disclosures
A material fact is anything that could affect a buyer's decision or the property's value, and licensees must disclose known material facts. Federal law requires a lead-based paint disclosure and EPA pamphlet for housing built before 1978, with a 10-day testing opportunity for the buyer. Sellers and their agents may not conceal or misrepresent defects, and honesty in disclosure protects against later fraud claims.
Arizona Disclosure Documents
Arizona sellers commonly use the Seller Property Disclosure Statement (SPDS) to report known conditions of a resale home. For certain unincorporated rural parcels of five acres or fewer, an Affidavit of Disclosure informs the buyer about access, utilities, flooding, and similar concerns. Developers of subdivided land must provide a Public Report from the ADRE. Choosing the correct document for the transaction type is essential.
Environmental Hazards
Common hazards include asbestos, radon, mold, underground storage tanks, and contaminated soil that may require remediation. In parts of Arizona, sellers may also note the presence of scorpions or other pests and desert-specific conditions. When a hazard is known or suspected, the licensee should recommend qualified inspection and disclose the issue rather than offering opinions beyond their expertise.