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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 Florida, 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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Florida Requirements for Property Disclosure Statement

  • Johnson v. Davis Disclosure Requirement (Johnson v. Davis, 480 So.2d 625 (Fla. 1985))

    Florida case law established in Johnson v. Davis requires sellers to disclose all known facts materially affecting the value of residential property which are not readily observable and are not known to the buyer.

  • Florida Residential Property Disclosure (Florida Statutes Chapter 475)

    Florida law requires sellers to disclose all known defects that materially affect the value of residential property, though Florida does not have a specific statutory form for disclosure.

  • Lead-Based Paint Disclosure (42 U.S.C. § 4852d; 24 CFR Part 35; 40 CFR Part 745)

    Federal law 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.

  • Radon Gas Disclosure (Florida Statutes § 404.056(5))

    Florida law requires that real estate contracts for residential properties include a notification about radon gas as a potential health hazard.

  • Homeowners' Association Disclosure (Florida Statutes § 720.401)

    Sellers must disclose if the property is subject to a homeowners' association, including providing governing documents, financial information, and current assessment amounts.

  • Condominium Disclosure Requirements (Florida Statutes § 718.503)

    Sellers of condominiums must provide specific documents including declaration of condominium, articles of incorporation, bylaws, and financial information of the association.

  • Coastal Property Disclosure (Florida Statutes § 161.57)

    Properties in coastal areas require disclosure about the property's location within a coastal construction control line and potential implications for insurance, permits, and coastal hazards.

  • Flood Zone Disclosure (Johnson v. Davis precedent; National Flood Insurance Act)

    While not explicitly required by Florida statute, case law under Johnson v. Davis suggests sellers should disclose if a property is in a flood zone or has experienced flooding issues.

  • Mold and Water Intrusion Disclosure (Johnson v. Davis, 480 So.2d 625 (Fla. 1985))

    Under Johnson v. Davis principles, sellers must disclose known mold problems or water intrusion issues that materially affect property value.

  • Sinkhole Disclosure (Florida Statutes § 627.7073(2)(c))

    Sellers must disclose any sinkhole claims made on the property, including whether any money was received for sinkhole damage and how it was used.

  • Building Code Violation Disclosure (Johnson v. Davis, 480 So.2d 625 (Fla. 1985))

    Material building code violations that affect the property's value must be disclosed under Johnson v. Davis principles.

  • Environmental Hazards Disclosure (Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); Johnson v. Davis)

    Known environmental contamination or hazards on the property must be disclosed under both federal and state laws.

  • Property Tax Disclosure (Florida Statutes § 689.261)

    Accurate information about property taxes, including any pending reassessments or special assessments, should be disclosed.

  • Defective Drywall Disclosure (Florida Statutes § 501.97)

    Sellers must disclose knowledge of defective drywall in the property, particularly Chinese drywall that has been linked to corrosion and health issues.

  • Termite and Wood-Destroying Organism Disclosure (Johnson v. Davis, 480 So.2d 625 (Fla. 1985))

    Sellers must disclose known termite damage or active infestations that materially affect the property's value.

  • Septic System Disclosure (Florida Statutes § 381.0065)

    Properties with septic systems require disclosure about the system's location, condition, and maintenance history.

  • Methamphetamine Production Disclosure (Johnson v. Davis precedent; Florida Statutes Chapter 893)

    If a property was used for methamphetamine production, this material fact must be disclosed as it affects health and property value.

  • Airport Noise Disclosure (Florida Statutes § 333.03)

    Properties near airports may require disclosure about noise zones and potential impacts on quality of life and property value.

  • Community Development District Disclosure (Florida Statutes § 190.048)

    Sellers must disclose if the property is in a Community Development District (CDD) and provide information about associated fees and assessments.

  • Material Defects Disclosure (15 U.S.C. § 1701 et seq.)

    Under the federal Interstate Land Sales Full Disclosure Act, developers and sellers must disclose material facts about the property in certain interstate land sales.

Frequently Asked Questions