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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 Louisiana, 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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Louisiana Requirements for Property Disclosure Statement

  • Louisiana Property Disclosure Act (La. R.S. 9:3195-3199)

    Requires sellers of residential real property to complete a property disclosure document describing the condition of the property, including known defects. This is the primary state law governing property disclosures in Louisiana.

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

    Federal law requiring 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 (La. R.S. 9:3198(A)(1))

    Louisiana law requires disclosure of whether property is located in a flood zone, flood plain, or area designated as a flood hazard area, and whether flood insurance is required.

  • Mold Disclosure (La. R.S. 9:3198(A)(1))

    Requires disclosure of known presence of mold or other biological hazards that exceed safe levels or pose health risks to occupants.

  • Methamphetamine Laboratory Disclosure (La. R.S. 9:3198(A)(1); La. R.S. 40:1724)

    Requires disclosure if the property was previously used as a methamphetamine laboratory and has not been certified as remediated.

  • Stigmatized Property Disclosure (La. R.S. 37:1468)

    Louisiana law specifically addresses disclosure requirements for properties where homicides, suicides, or deaths occurred, stating that these psychological impacts are not material facts requiring disclosure.

  • Homeowners Association Disclosure (La. R.S. 9:3198(A)(1))

    Requires disclosure of property subject to homeowners association (HOA) regulations, including fees, restrictions, and pending special assessments.

  • Structural Defects Disclosure (La. R.S. 9:3198(A)(1))

    Requires disclosure of known structural defects, including foundation issues, roof problems, and other material defects affecting the physical integrity of the property.

  • Water Intrusion and Drainage Issues (La. R.S. 9:3198(A)(1))

    Requires disclosure of known water intrusion problems, drainage issues, or water damage to the property.

  • Termite Contracts and Wood-Destroying Insect Disclosure (La. R.S. 9:3198(A)(1))

    Requires disclosure of current termite contracts, known termite damage, or presence of wood-destroying insects.

  • Mineral Rights Disclosure (La. R.S. 9:3198(A)(1))

    Louisiana law requires disclosure of whether mineral rights will be transferred with the property, which is particularly important in a state with significant oil and gas activity.

  • Servitudes, Easements, and Encroachments (La. R.S. 9:3198(A)(1))

    Requires disclosure of known servitudes (easements), encroachments, or boundary disputes affecting the property.

  • Previous Property Insurance Claims (La. R.S. 9:3198(A)(1))

    Requires disclosure of insurance claims filed for property damage within a specified period, which may affect future insurability.

  • Sewerage and Water Board Disclosure (La. R.S. 9:3198(A)(1); New Orleans Municipal Code)

    In certain parishes, particularly Orleans Parish, disclosure of Sewerage and Water Board issues, including sewer line problems or special assessments.

  • Coastal Zone Management Disclosure (La. R.S. 49:214.21 et seq.)

    Properties in Louisiana's coastal areas may require disclosure of coastal zone management restrictions, erosion issues, or special building requirements.

  • Military Airport Noise Zone Disclosure (10 U.S.C. § 2684a)

    Federal law requires disclosure if property is located in a noise zone or accident potential zone near a military installation.

  • Radon Gas Disclosure (EPA Indoor Air Quality Guidelines; La. R.S. 9:3198(A)(1))

    While not specifically mandated in Louisiana, federal EPA guidelines recommend disclosure of known radon gas issues as a health hazard.

  • Wetlands Disclosure (33 U.S.C. § 1344; La. R.S. 9:3198(A)(1))

    Properties containing federally protected wetlands require disclosure of wetland status and potential development restrictions under Clean Water Act provisions.

  • Historic District Restrictions (La. R.S. 25:731 et seq.; La. R.S. 9:3198(A)(1))

    Properties in historic districts must disclose applicable restrictions on modifications, renovations, or demolition that may affect property use.

  • Material Defect Disclosure Obligation (La. Civil Code Art. 2520-2548)

    General legal obligation under Louisiana Civil Code to disclose known material defects that would not be discoverable by a reasonably prudent buyer, based on redhibition principles.

Frequently Asked Questions