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Property Disclosure Statement Guide: What Landlords, Tenants, and Investors Need to Know

Learn everything about property disclosure statements, including legal requirements for sellers, what tenants should know when their rental is being sold, and how investors can protect themselves during transactions.

Introduction

A Property Disclosure Statement is a legally significant document that requires property sellers to reveal known material defects and issues with a property. Whether you're a tenant whose rental home is being sold, a landlord selling your rental property, or a real estate investor managing multiple properties, understanding disclosure requirements is crucial to protect your interests and avoid potential legal disputes. This guide explains what property disclosure statements entail, who needs to complete them, what must be disclosed, and how these documents affect different parties in real estate transactions.

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Key Things to Know

  1. 1

    Property disclosure requirements vary by state, so always check your local laws or consult with a real estate attorney to understand specific obligations in your area.

  2. 2

    Disclosure statements typically cover known issues only—sellers generally aren't required to hire inspectors to discover unknown problems.

  3. 3

    For landlords selling rental properties, tenant-reported maintenance issues should be included in your disclosures, even if you haven't personally verified them.

  4. 4

    Tenants' lease rights are generally protected when a rental property is sold; the new owner typically must honor existing lease terms.

  5. 5

    Real estate investors should maintain detailed property records and consider pre-listing inspections to facilitate accurate disclosures.

  6. 6

    Selling a property 'as-is' does not exempt sellers from disclosure requirements—you must still disclose known material defects.

  7. 7

    The consequences of inadequate disclosure can include lawsuits, monetary damages, rescission of the sale, and significant legal expenses.

  8. 8

    When in doubt about whether to disclose something, the safer legal approach is to include it in your disclosure statement.

Key decisions before you file

Before you file a Property Disclosure Statement in Delaware, a few decisions shape the document: which option to choose and what each one means. The Property Disclosure Statement guide walks through them.

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Delaware Requirements for Property Disclosure Statement

  • Delaware Seller Disclosure of Real Property Condition (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Requires sellers to complete a standardized disclosure form detailing the property's condition, including all known material defects that would significantly affect the property's value or that would pose an unreasonable risk to people on the property.

  • Exemptions from Disclosure Requirements (Delaware Code Title 6, Chapter 25, Subchapter II, § 2573)

    Outlines specific transactions exempt from disclosure requirements, such as transfers pursuant to court order, between co-owners, or to a spouse or relative.

  • Timing of Disclosure (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Mandates that the seller must provide the completed disclosure form to a buyer prior to the time the buyer makes an offer to purchase the property.

  • Disclosure Form Content Requirements (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Specifies the required content of the disclosure form, including structural components, systems, fixtures, and environmental conditions of the property.

  • Seller's Duty to Disclose Material Defects (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Establishes the seller's obligation to disclose known material defects that are not readily observable to the buyer and that would significantly affect the property's value.

  • Lead-Based Paint Disclosure (42 U.S.C. § 4852d; 40 CFR Part 745)

    Requires disclosure of known lead-based paint and lead-based paint hazards in housing built before 1978, including providing buyers with an EPA-approved information pamphlet.

  • Flood Zone Disclosure (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Requires disclosure of whether the property is located in a designated flood zone or area, and if flood insurance is required by federal law.

  • Environmental Hazards Disclosure (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Mandates disclosure of known environmental hazards on the property, including but not limited to radon, mold, asbestos, and underground storage tanks.

  • Buyer's Right to Rescind (Delaware Code Title 6, Chapter 25, Subchapter II, § 2574)

    Provides buyers with the right to terminate a purchase agreement within a specified time period after receiving a disclosure that reveals previously unknown material defects.

  • Seller's Liability for Misrepresentation (Delaware Code Title 6, Chapter 25, Subchapter II, § 2574)

    Establishes seller liability for intentional or negligent misrepresentation or omission of material facts in the disclosure statement.

  • Homeowners Association Disclosure (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Requires disclosure of the property's inclusion in a homeowners association, including fees, restrictions, and governing documents.

  • Wetlands Disclosure (Delaware Code Title 7, Chapter 66)

    Mandates disclosure if any portion of the property contains wetlands, which may limit development or use of the property.

  • Megan's Law Disclosure (Delaware Code Title 11, Chapter 41, § 4120)

    Informs potential buyers about the Delaware Sex Offender Central Registry and their right to search it to determine if registered offenders reside in the vicinity of the property.

  • Agricultural Use Protection Disclosure (Delaware Code Title 3, Chapter 9, § 910)

    Requires disclosure if the property is located near land used for agricultural purposes, which may subject the property to noise, dust, odors, or other effects of agricultural operations.

  • Coastal Area Management Act Disclosure (Delaware Code Title 7, Chapter 70)

    Requires disclosure if the property is located within areas regulated by the Delaware Coastal Zone Management Act, which may restrict development or use.

  • Airport Noise Disclosure (Delaware Code Title 2, Chapter 6)

    Mandates disclosure if the property is located within an airport noise zone that may subject the property to noise from aircraft operations.

  • Historic District Disclosure (Delaware Code Title 22, Chapter 6)

    Requires disclosure if the property is located within a historic district, which may subject alterations or improvements to review by a historic preservation commission.

  • Methamphetamine Production Disclosure (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Requires disclosure if the property was used for the production of methamphetamine, which may pose health risks to occupants.

  • Water and Sewer Disclosure (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Mandates disclosure of the property's water source (public, well, etc.) and sewage disposal system (public sewer, septic, etc.), including any known problems with these systems.

  • Radon Gas Disclosure (Delaware Code Title 6, Chapter 25, Subchapter II, § 2572)

    Requires disclosure of known presence of radon gas, a naturally occurring radioactive gas that can cause health problems, and any radon testing that has been conducted on the property.

Frequently Asked Questions