Skip to content

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.

0/5000

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

Open the Property Disclosure Statement guide

Customize your Property Disclosure Statement Template with DocDraft

Indiana Requirements for Property Disclosure Statement

  • Indiana Seller Disclosure Law (Indiana Code § 32-21-5)

    Requires sellers of residential real estate to complete a Seller's Residential Real Estate Sales Disclosure Form revealing known material defects in the property's condition. This form must be provided to a prospective buyer before an offer is accepted.

  • Disclosure Form Requirements (Indiana Code § 32-21-5-7)

    Specifies the exact format and content of the disclosure form, which must include information about structural components, systems, hazardous conditions, and other property characteristics as prescribed by the Indiana Real Estate Commission.

  • Timing of Disclosure (Indiana Code § 32-21-5-10)

    Mandates that the disclosure form must be provided to a prospective buyer before an offer is accepted. If delivered after acceptance, the buyer has two business days to terminate the agreement.

  • Exemptions from Disclosure Requirements (Indiana Code § 32-21-5-2)

    Lists specific transactions exempt from disclosure requirements, including transfers pursuant to court order, between co-owners, to or from the government, and certain other transfers not made in the ordinary course of business.

  • Disclosure of Meth Contamination (Indiana Code § 32-21-5-7(14))

    Requires disclosure if the property was used in the production of methamphetamine or was the site of a methamphetamine lab, as this constitutes a material defect.

  • Lead-Based Paint Disclosure (42 U.S.C. § 4852d; 24 CFR Part 35; 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 and a 10-day period to conduct a paint inspection or risk assessment.

  • Flood Zone Disclosure (Indiana Code § 32-21-5-7(10))

    Requires disclosure if the property is located in a FEMA-designated flood zone or has experienced flooding, which may affect insurance requirements and property value.

  • Airport Noise Disclosure (Indiana Code § 32-21-5-7)

    Requires disclosure if the property is affected by noise from nearby airports, which could impact quality of life and property value.

  • Homeowners Association Disclosure (Indiana Code § 32-21-5-7(5))

    Requires disclosure of the property's inclusion in a homeowners association, including any mandatory fees, assessments, and restrictive covenants that may affect the buyer's use of the property.

  • Structural Defects Disclosure (Indiana Code § 32-21-5-7(1))

    Requires disclosure of known structural defects in the foundation, roof, walls, floors, or other structural components that could affect the property's value or safety.

  • Water and Sewer System Disclosure (Indiana Code § 32-21-5-7(2))

    Requires disclosure of the type, condition, and known defects of water and sewer systems serving the property, including wells, septic systems, or municipal connections.

  • Mechanical Systems Disclosure (Indiana Code § 32-21-5-7(3))

    Requires disclosure of the condition and known defects in heating, air conditioning, electrical, plumbing, and other mechanical systems of the property.

  • Environmental Hazards Disclosure (Indiana Code § 32-21-5-7(13))

    Requires disclosure of known environmental hazards affecting the property, such as radon, asbestos, toxic materials, underground storage tanks, or contaminated soil or water.

  • Mold Disclosure (Indiana Code § 32-21-5-7)

    Requires disclosure of known presence of mold or other fungi that may affect the property's structural integrity or the health of occupants.

  • Pest Infestation Disclosure (Indiana Code § 32-21-5-7(7))

    Requires disclosure of known pest infestations or damage, particularly from termites or other wood-destroying organisms that may affect the property's structural integrity.

  • Drainage and Grading Issues Disclosure (Indiana Code § 32-21-5-7(9))

    Requires disclosure of known drainage or grading problems that may result in standing water or moisture intrusion into the structure.

  • Legal Issues Disclosure (Indiana Code § 32-21-5-7(6))

    Requires disclosure of known legal issues affecting the property, such as boundary disputes, easements, encroachments, or violations of zoning, building codes, or other restrictions.

  • Stigmatized Property Disclosure (Indiana Code § 32-21-5-1)

    Indiana law does not specifically require disclosure of psychological stigmas (such as deaths, murders, or paranormal claims) unless they constitute a material defect affecting the property's physical condition.

  • Misrepresentation Liability (Indiana Code § 32-21-5-11)

    Establishes liability for sellers who knowingly make false or misleading statements on the disclosure form, potentially subjecting them to damages for fraud or misrepresentation.

  • Federal Fair Housing Act Compliance (42 U.S.C. § 3601-3619)

    Prohibits discrimination in real estate transactions based on race, color, religion, sex, handicap, familial status, or national origin, affecting how information in disclosure statements is presented and used.

Frequently Asked Questions