Seller Disclosure

A seller disclosure is a written statement by the seller of residential property, given to the buyer before the buyer is bound, describing defects and conditions affecting the property that the seller is aware of. It is a creature of state law: what must be disclosed, on what form, to whom, and by when are all set by the state where the property sits, and there is no national requirement and no national form. "Seller disclosure" is a descriptive phrase rather than an official title, so the document's actual name is whatever the state that requires it decided to call it.

California is a useful example because its scheme is set out in one article of its Civil Code. Section 1102 applies the article to transfers of single-family residential property by sale, exchange, real property sales contract, lease with an option to purchase, other options to purchase, and ground leases coupled with improvements. Section 1102.6 prescribes the form itself, the Real Estate Transfer Disclosure Statement. And section 1102(c) closes the obvious escape route in one sentence: "Any waiver of the requirements of this article is void as against public policy."

A disclosure reports knowledge, and that is its whole shape. The seller is answering what they are aware of, not certifying the condition of the building. A seller who has lived in a house for 20 years without a basement leak answers honestly that they know of none, and that answer is compatible with a leak the previous owner concealed, with a defect behind a wall, and with a problem that has simply never presented itself. Published guidance on inspection contingencies on this site makes the same point from the other direction: the disclosure and the inspection exist side by side because neither answers the other's question.

The form does not exhaust the duty. California's legislature said so expressly when it clarified the statutory statement, recording that it "did not intend to affect the existing obligations of the parties to a real estate contract, or their agents, to disclose any fact materially affecting the value and desirability of the property". The sentence goes on to give examples, introduced by "including, but not limited to", which is the drafting that keeps the list from becoming the boundary. A completed form is the floor of what a seller owes, not the ceiling, and a seller who answers every printed question accurately while staying silent about something material has not necessarily discharged anything.

The exemptions are where the surprises are. California's section 1102.2 takes an entire class of transactions out of the article, and reading the list is the fastest way to understand who is not making disclosures. It excludes transfers under court order, "including, but not limited to, sales ordered by a probate court in the administration of an estate, sales pursuant to a writ of execution, sales by any foreclosure sale, transfers by a trustee in bankruptcy, sales by eminent domain, and sales resulting from a decree for specific performance"; sales by a lender that took the property through foreclosure or a deed in lieu; sales by a fiduciary administering a trust, guardianship, conservatorship or a decedent's estate, with an exception where a revocable-trust trustee is a natural person who used to own or occupy the property; transfers between co-owners; transfers to a spouse or to relatives in the transferor's line of consanguinity; transfers between spouses under a dissolution judgment or a related property settlement; and transfers to or from a government entity. A buyer told that the seller is exempt from disclosure has been told something important about how much investigation the purchase will need to carry on its own.

Florida shows a different architecture entirely, which is why national generalizations fail. Rather than one general form, Florida legislates hazard by hazard, adding a section to its conveyancing chapter each time it decides something must be told. It requires a seller of real property to disclose known defects in the property's sanitary sewer lateral before the contract is executed. It requires a seller who has severed or retained subsurface rights to give a boldface disclosure summary. And a flood disclosure added in 2024 and amended in 2025 requires every seller of residential real property to complete a prescribed form "at or before the time the sales contract is executed", asking whether the seller knows of flooding that damaged the property during their ownership, whether they have filed a flood-related insurance claim including under the National Flood Insurance Program, and whether they have received flood-damage assistance including from FEMA. That last one is worth noticing for what it does not ask about: it is a history question, not a question about the property's mapped flood designation.

What "material" means depends on whose statute you are reading. California states the standard in general terms, referring to "any fact materially affecting the value and desirability of the property" and then offering examples rather than a closed list. Florida names specific facts instead: known sewer-lateral defects, retained subsurface rights, and flood history. Neither approach tells you what the other requires, which is the practical case for reading the statute and the form that apply where the property sits. What does carry over is the instruction to a buyer: read what the seller wrote, note what they said they did not know, and treat both as a place to point the inspection rather than a substitute for it.

In a state that requires one, the sequence usually runs like this.

1. The seller completes the statutory or customary form, answering from their own knowledge about the property's condition, systems, past repairs, and known legal or environmental issues.

2. The buyer receives it before being bound. The point in the transaction varies: sometimes before an offer, sometimes within days of acceptance, with a right to withdraw if it arrives late.

3. The buyer reads it against what they can see, and uses it to direct the inspection at the areas the seller has flagged or conspicuously not flagged.

4. Federal duties, if any, run in parallel. For pre-1978 housing the federal lead-based paint disclosure applies on its own terms regardless of what the state form says.

5. Amendment, if something changes. A seller who learns of a defect after delivering the form is generally expected to update it.

A hypothetical, on what a truthful disclosure does and does not settle. Marisol is selling a house she bought four years ago. She discloses a $3,200 foundation repair she paid for in 2023, because she knows about it. She answers "no knowledge" about drainage, truthfully, because she has never had water in the basement. The buyer's inspector finds that the downspouts discharge two feet from the foundation and the grade slopes toward the house, and estimates $2,600 to correct it. Marisol has not breached anything. The disclosure did its job, which was to tell the buyer what she knew, and the inspection did its job, which was to tell the buyer what she did not.

Pros

• It puts the seller's own knowledge on the record in writing, which is information no inspection can produce.
• It usually arrives early enough to direct where the buyer spends inspection money.
• Where a state makes the duty unwaivable, the protection cannot be negotiated away in a competitive market.
• It creates a documented record, which is what a buyer needs if a concealed defect surfaces later.

Cons

• It reports knowledge, so an honest seller who has never looked into something discloses nothing about it.
• Whole categories of seller are exempt, and they include the ones a buyer would most want to hear from, such as lenders selling foreclosed property and fiduciaries selling an estate's house.
• The requirements differ enough between states that experience from a previous purchase can mislead.
• Enforcement is retrospective and adversarial. A buyer's remedy for a false disclosure is a claim after closing, not a fix before it.
• The form's structure invites minimal answers, and "no knowledge" is both the safest response for a seller and the least informative one for a buyer.