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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 Mississippi, 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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Mississippi Requirements for Property Disclosure Statement

  • Mississippi Property Disclosure Act (Mississippi Code § 89-1-501 through § 89-1-523)

    Requires sellers of residential real property consisting of one to four dwelling units to provide a written disclosure statement to buyers. This is the primary state law governing property disclosures in Mississippi.

  • Disclosure Form Requirements (Mississippi Code § 89-1-509)

    Specifies the format and content requirements for the disclosure statement, including structural elements, systems, and known defects that must be disclosed.

  • Exemptions from Disclosure Requirements (Mississippi Code § 89-1-501)

    Outlines specific transactions exempt from disclosure requirements, such as court-ordered transfers, transfers between co-owners, or transfers to family members.

  • Timing of Disclosure (Mississippi Code § 89-1-507)

    Requires that the disclosure statement be delivered to a buyer prior to the signing of a binding contract or at the time of signing if the contract is contingent on buyer's receipt of disclosure.

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

    Federal requirement to disclose known lead-based paint and lead-based paint hazards in housing built before 1978, including providing an EPA-approved information pamphlet.

  • Flood Zone Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure of whether the property is located in a designated flood zone or area of special flood hazard, and whether flood insurance is required.

  • Methamphetamine Production Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure if the property was used in the production of methamphetamine or other controlled substances.

  • Homeowners Association Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure of any mandatory homeowners association, including fees, assessments, and restrictions that may affect the property.

  • Material Defect Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure of all known material defects that could significantly affect the value of the property or a buyer's decision to purchase.

  • Seller's Liability for Misrepresentation (Mississippi Code § 89-1-513)

    Establishes liability for sellers who knowingly make false or misleading statements or who fail to disclose known material defects.

  • Buyer's Right to Rescind (Mississippi Code § 89-1-511)

    Provides buyers with the right to rescind a contract within specified time periods if disclosures are not provided or are materially inaccurate.

  • Stigmatized Property Disclosure (Mississippi Code § 89-1-527)

    Addresses whether disclosure is required for properties where deaths, crimes, or other stigmatizing events occurred that might psychologically impact the property's value.

  • Environmental Hazards Disclosure (Mississippi Code § 89-1-509)

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

  • Water and Sewer System Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure of the type, condition, and any known problems with water supply and sewage disposal systems serving the property.

  • Structural Defects Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure of known structural defects, including foundation issues, roof problems, or other significant structural concerns.

  • Boundary Dispute Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure of any known boundary disputes, encroachments, or easements affecting the property.

  • Mold and Moisture Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure of known mold problems or moisture issues that could lead to mold growth or structural damage.

  • Pest Infestation Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure of known pest infestations, including termites, wood-destroying organisms, or evidence of previous treatment for such pests.

  • Real Estate Transfer Disclosure Statement (12 U.S.C. § 2601 et seq.; 12 CFR Part 1024 (Regulation X))

    Federal requirement that real estate transactions comply with RESPA (Real Estate Settlement Procedures Act) disclosure requirements regarding settlement costs and services.

  • Military Airport Disclosure (Mississippi Code § 89-1-509)

    Requires disclosure if the property is located near a military installation or airport that may subject the property to noise or other impacts.

Frequently Asked Questions