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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 Montana, 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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Montana Requirements for Property Disclosure Statement

  • Montana Seller Disclosure Requirements (Montana Code Annotated § 70-20-110)

    Montana law requires sellers to disclose known material defects that could affect the value or desirability of the property. This includes structural issues, water damage, pest infestations, and other significant problems.

  • Water Rights Disclosure (Montana Code Annotated § 85-2-424)

    Sellers must disclose information about water rights associated with the property, including any shared water systems, wells, irrigation rights, or water disputes.

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

    For properties built before 1978, sellers must disclose known lead-based paint hazards, provide buyers with an EPA-approved information pamphlet, and allow buyers a 10-day period to conduct a lead-based paint inspection.

  • Mold Disclosure (Montana Code Annotated § 70-16-703)

    Sellers must disclose known presence of mold or moisture conditions that might lead to mold growth in the property.

  • Radon Gas Disclosure (Montana Code Annotated § 75-3-606)

    Sellers must disclose known radon gas issues or testing results, as radon is a naturally occurring radioactive gas that can cause health problems.

  • Methamphetamine Contamination Disclosure (Montana Code Annotated § 75-10-1301)

    Sellers must disclose if the property was used as a clandestine methamphetamine lab or if there is known methamphetamine contamination.

  • Floodplain Disclosure (Montana Code Annotated § 76-5-109)

    Sellers must disclose if the property is located within a designated floodplain and provide information about flood insurance requirements.

  • Septic System Disclosure (Montana Code Annotated § 75-6-121)

    Sellers must disclose information about the property's septic system, including its location, age, maintenance history, and any known issues.

  • Easements and Encroachments (Montana Code Annotated § 70-17-101)

    Sellers must disclose any known easements, encroachments, or boundary disputes affecting the property.

  • Homeowners Association Disclosure (Montana Code Annotated § 70-23-613)

    Sellers must disclose if the property is subject to a homeowners association, including information about dues, restrictions, and governing documents.

  • Material Fact Disclosure (Montana Code Annotated § 37-51-313)

    Sellers have a duty to disclose all known material facts that could significantly affect the value or desirability of the property and that are not readily observable to the buyer.

  • Environmental Hazards Disclosure (Montana Code Annotated § 75-10-704)

    Sellers must disclose known environmental hazards on the property, including contaminated soil, underground storage tanks, or nearby environmental concerns.

  • Property Tax Information (Montana Code Annotated § 15-7-102)

    Sellers must provide accurate information about the property's tax assessment, tax rates, and any special assessments or tax liens.

  • Zoning and Land Use Disclosure (Montana Code Annotated § 76-2-203)

    Sellers must disclose known zoning restrictions, land use regulations, or pending changes that could affect the property's use.

  • Utility Services Disclosure (Montana Code Annotated § 69-3-103)

    Sellers must disclose information about utility services available to the property, including water, sewer, electricity, natural gas, and internet connectivity.

  • Structural Defects Disclosure (Montana Code Annotated § 70-20-110)

    Sellers must disclose known structural defects, including foundation issues, roof problems, or other significant structural concerns.

  • Previous Insurance Claims (Montana Code Annotated § 33-18-210)

    Sellers must disclose information about previous insurance claims related to property damage, especially those that might affect future insurability.

  • Pest Infestation Disclosure (Montana Code Annotated § 80-15-302)

    Sellers must disclose known pest infestations or damage, including termites, carpenter ants, or other wood-destroying organisms.

  • Stigmatized Property Disclosure (Montana Code Annotated § 37-51-102)

    Montana law addresses whether sellers must disclose if a property is stigmatized due to events such as deaths, crimes, or paranormal claims.

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

    Property disclosures must comply with the Federal Fair Housing Act, which prohibits discrimination based on race, color, religion, sex, disability, familial status, or national origin.

Frequently Asked Questions