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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 Rhode Island, 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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Rhode Island Requirements for Property Disclosure Statement

  • Rhode Island Real Estate Sales Disclosure Act (Rhode Island General Laws § 5-20.8-1 through § 5-20.8-11)

    Requires sellers to provide written disclosure of known defects in the property before the signing of any agreement to transfer real estate. This comprehensive law mandates disclosure of material defects in structure, systems, and legal issues affecting the property.

  • 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 and a 10-day period to conduct a paint inspection or risk assessment.

  • Rhode Island Lead Hazard Mitigation Act (Rhode Island General Laws § 42-128.1-1 through § 42-128.1-13)

    Requires specific disclosures regarding lead hazards in pre-1978 housing, including compliance with lead hazard mitigation standards and providing tenants/buyers with information about lead poisoning prevention.

  • Flood Zone Disclosure (Rhode Island General Laws § 5-20.8-2(a)(11))

    Requires disclosure of whether property is located in a flood zone or flood plain and if flood insurance is required. Must disclose any past flooding events or water penetration issues affecting the property.

  • Wetlands Disclosure (Rhode Island General Laws § 5-20.8-2(a)(12))

    Requires disclosure of the presence of wetlands on the property as defined by Rhode Island Department of Environmental Management regulations, which may limit development or use of portions of the property.

  • Sewage System Disclosure (Rhode Island General Laws § 5-20.8-2(a)(13))

    Requires disclosure of the type of sewage system (public sewer, private sewer, septic system, cesspool, etc.), including any known malfunctions, maintenance requirements, and compliance with state regulations.

  • Cesspools Disclosure and Phase-Out Requirements (Rhode Island General Laws § 23-19.15-1 through § 23-19.15-12)

    Requires disclosure of any cesspools on the property and information about Rhode Island's cesspool phase-out requirements, which mandate replacement of cesspools in certain circumstances.

  • Water System Disclosure (Rhode Island General Laws § 5-20.8-2(a)(14))

    Requires disclosure of the source of potable water (public water, private water, well, etc.), including any known issues with water quality, quantity, or compliance with state regulations.

  • Radon Disclosure (Rhode Island General Laws § 5-20.8-2(a)(15))

    Requires disclosure of known presence of radon gas in the property and results of any radon tests performed, as radon is a known carcinogen that can accumulate in buildings.

  • Homeowners Association/Condo Association Disclosure (Rhode Island General Laws § 5-20.8-2(a)(16))

    Requires disclosure of property's inclusion in a homeowners association, condominium association, or other community association, including fees, restrictions, and pending special assessments.

  • Historic District Designation (Rhode Island General Laws § 5-20.8-2(a)(17))

    Requires disclosure if the property is located in a historic district, which may subject the property to special regulations regarding alterations, renovations, and exterior changes.

  • Fire District Disclosure (Rhode Island General Laws § 5-20.8-2(a)(18))

    Requires disclosure of the fire district in which the property is located, as this affects property tax rates and emergency services available to the property.

  • Structural Defects Disclosure (Rhode Island General Laws § 5-20.8-2(a)(2))

    Requires disclosure of known structural defects including foundation issues, roof problems, water damage, termite infestation, and other material defects that could affect the property's value or safety.

  • Mechanical Systems Disclosure (Rhode Island General Laws § 5-20.8-2(a)(3))

    Requires disclosure of the condition of mechanical systems including HVAC, electrical, plumbing, and appliances, including known defects, approximate age, and maintenance history.

  • Mold and Dampness Disclosure (Rhode Island General Laws § 5-20.8-2(a)(4))

    Requires disclosure of known presence of mold, dampness, or moisture infiltration issues in the property, which could affect indoor air quality and structural integrity.

  • Insulation and Energy Efficiency Disclosure (Rhode Island General Laws § 5-20.8-2(a)(5))

    Requires disclosure of information about insulation in walls, ceilings, and floors, as well as energy efficiency features or deficiencies that could affect utility costs.

  • Boundary Line Disputes (Rhode Island General Laws § 5-20.8-2(a)(6))

    Requires disclosure of known boundary line disputes, encroachments, or unresolved claims regarding property lines that could affect ownership rights or usable property area.

  • Easements and Encumbrances (Rhode Island General Laws § 5-20.8-2(a)(7))

    Requires disclosure of known easements, rights-of-way, or other encumbrances that could restrict use of the property or grant access rights to others across the property.

  • Zoning Violations Disclosure (Rhode Island General Laws § 5-20.8-2(a)(8))

    Requires disclosure of known zoning violations, non-conforming uses, or violations of building codes, housing codes, or other land use laws affecting the property.

  • Environmental Hazards Disclosure (Rhode Island General Laws § 5-20.8-2(a)(9))

    Requires disclosure of known environmental hazards on or affecting the property, including but not limited to toxic materials, underground storage tanks, contaminated soil or water.

Frequently Asked Questions