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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 Massachusetts, 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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Massachusetts Requirements for Property Disclosure Statement

  • Lead Paint Disclosure (Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. § 4852d))

    Federal law requires disclosure of known lead-based paint and lead-based paint hazards in housing built before 1978. Sellers must provide purchasers with an EPA-approved lead hazard information pamphlet and disclose known lead-based paint and hazards.

  • Massachusetts Lead Paint Law (Massachusetts Lead Law (M.G.L. c. 111, §§ 189A-199B))

    Massachusetts law requires property owners to disclose the presence of lead paint in residential properties built before 1978 where children under six reside. The law mandates specific notification procedures and provides for strict liability for lead poisoning.

  • Seller's Disclosure Duty (Established in Grossman v. Waltham Chemical Co. (1968) and subsequent cases)

    Massachusetts case law establishes that sellers have a duty to disclose known material defects that are not readily observable by the buyer. Failure to disclose can constitute fraud or misrepresentation.

  • Septic System Disclosure (310 CMR 15.000 (Title 5 of the State Environmental Code))

    Massachusetts Title 5 regulations require property owners to disclose the status of septic systems. A Title 5 inspection must be completed within two years prior to the sale, and results must be disclosed to potential buyers.

  • Mold and Moisture Disclosure (Common law duty based on Gossels v. Fleet National Bank (2004))

    While not specifically mandated by statute, Massachusetts case law has established that sellers must disclose known mold or moisture problems as material defects that could affect health or property value.

  • Urea Formaldehyde Foam Insulation (UFFI) Disclosure (M.G.L. c. 255, § 12I)

    Massachusetts law requires disclosure of the presence of urea formaldehyde foam insulation in residential properties, which was commonly used before being banned in 1979 due to health concerns.

  • Private Water Supply Disclosure (M.G.L. c. 111, § 122A (Board of Health regulations))

    Sellers must disclose information about private water supplies, including wells, their condition, water quality test results, and any known issues with the water supply system.

  • Hazardous Waste Sites Disclosure (M.G.L. c. 21E (Massachusetts Oil and Hazardous Material Release Prevention Act))

    Massachusetts law requires disclosure of known hazardous waste sites or contamination on or near the property, including properties listed in the Massachusetts Contingency Plan (MCP) database.

  • Flooding and Water Damage Disclosure (Common law duty based on Grossman v. Waltham Chemical Co. (1968))

    Sellers must disclose known history of flooding, water penetration, or water damage, including whether the property is located in a FEMA-designated flood zone.

  • Structural Defects Disclosure (Common law duty based on Grossman v. Waltham Chemical Co. (1968))

    Sellers must disclose known structural defects, including foundation problems, roof issues, or other significant structural concerns that may affect the property's value or safety.

  • Pest Infestation Disclosure (Common law duty based on Grossman v. Waltham Chemical Co. (1968))

    Sellers must disclose known current or past pest infestations, including termites, carpenter ants, rodents, or other pests that may have caused damage to the property.

  • Homeowners' Association Disclosure (Common law duty based on Grossman v. Waltham Chemical Co. (1968))

    Sellers must disclose information about any homeowners' association, including fees, rules, restrictions, and pending special assessments that may affect the property.

  • Smoke and Carbon Monoxide Detector Compliance (M.G.L. c. 148, § 26F and 527 CMR 1.00)

    Massachusetts law requires that residential properties have properly installed and functioning smoke and carbon monoxide detectors that comply with state regulations before transfer of ownership.

  • Underground Storage Tank Disclosure (M.G.L. c. 21E and 310 CMR 80.00)

    Sellers must disclose the presence of underground storage tanks on the property, including oil tanks, whether currently in use, abandoned, or removed.

  • Radon Testing Disclosure (Common law duty based on Grossman v. Waltham Chemical Co. (1968))

    While not specifically required by statute, sellers should disclose known radon test results or the presence of radon mitigation systems as part of material defect disclosure.

  • Asbestos Disclosure (Common law duty based on Grossman v. Waltham Chemical Co. (1968))

    Sellers must disclose known presence of asbestos-containing materials in the property, particularly if damaged or friable, which could pose health risks.

  • Electromagnetic Fields Disclosure (Common law duty based on Grossman v. Waltham Chemical Co. (1968))

    Sellers should disclose proximity to high-voltage power lines or transformers that may create electromagnetic fields if they are aware of concerns or potential impacts.

  • Methamphetamine Production Disclosure (Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and M.G.L. c. 111, § 127A)

    Federal and state laws require disclosure if a property was used for methamphetamine production, as chemical residues can pose serious health hazards.

  • Stigmatized Property Disclosure (Common law duty based on Grossman v. Waltham Chemical Co. (1968))

    Massachusetts does not specifically require disclosure of deaths, crimes, or paranormal claims about a property unless directly asked, but material facts that could affect property value should be disclosed.

  • Municipal Building Code Violations (Common law duty based on Grossman v. Waltham Chemical Co. (1968))

    Sellers must disclose known outstanding building code violations or work performed without proper permits that may require remediation or affect the property's legal status.

Frequently Asked Questions