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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 Vermont, 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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Vermont Requirements for Property Disclosure Statement

  • Vermont Property Disclosure Law (27 V.S.A. § 1311)

    Requires sellers to disclose all material facts known about the property that could significantly affect its value or desirability. This is the primary Vermont statute governing property disclosures.

  • Lead-Based Paint Disclosure (42 U.S.C. § 4852d; 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.

  • Water and Wastewater System Disclosure (27 V.S.A. § 1311(b))

    Vermont law requiring disclosure of the type, condition, and performance of water and wastewater systems serving the property, including any known defects.

  • Flood Hazard Area Disclosure (27 V.S.A. § 1311(c))

    Requires disclosure if the property is located within a FEMA-designated flood hazard area and information about flood insurance requirements.

  • Act 250 Land Use Permit Disclosure (10 V.S.A. Chapter 151)

    Requires disclosure of any Act 250 land use permits that apply to the property and any conditions that may affect the property's use.

  • Underground Storage Tank Disclosure (10 V.S.A. Chapter 59)

    Requires disclosure of known underground storage tanks on the property, including their status, age, and any known leaks or remediation efforts.

  • Mold and Moisture Disclosure (27 V.S.A. § 1311)

    Requires disclosure of known mold problems or moisture issues that could lead to mold growth, including past remediation efforts.

  • Radon Disclosure (27 V.S.A. § 1311)

    Requires disclosure of known radon testing results and any radon mitigation systems installed on the property.

  • Homeowners' Association Disclosure (27 V.S.A. § 1311)

    Requires disclosure of any homeowners' association membership, fees, rules, and restrictions that apply to the property.

  • Structural Defects Disclosure (27 V.S.A. § 1311)

    Requires disclosure of known structural issues with the property, including foundation problems, roof leaks, or other significant defects.

  • Boundary Dispute Disclosure (27 V.S.A. § 1311)

    Requires disclosure of any known boundary disputes, encroachments, or unresolved property line issues.

  • Zoning and Land Use Restriction Disclosure (24 V.S.A. Chapter 117)

    Requires disclosure of zoning classifications and any land use restrictions that may affect the property's use or development potential.

  • Methamphetamine Production Disclosure (27 V.S.A. § 1311)

    Requires disclosure if the property was used for methamphetamine production, which can cause significant health hazards.

  • Drinking Water Contaminant Disclosure (10 V.S.A. Chapter 56)

    Requires disclosure of known contaminants in the drinking water supply, including PFAS chemicals, arsenic, or other hazardous substances.

  • Energy Efficiency Disclosure (30 V.S.A. § 51)

    Vermont's Home Energy Information Labeling law requires certain energy efficiency information to be disclosed to prospective buyers.

  • Asbestos Disclosure (18 V.S.A. Chapter 26)

    Requires disclosure of known asbestos-containing materials in the property and any abatement or encapsulation efforts.

  • Urea Formaldehyde Insulation Disclosure (15 U.S.C. § 2697)

    Federal law requiring disclosure of the presence of urea formaldehyde foam insulation, which may release harmful formaldehyde gas.

  • Electromagnetic Field Disclosure (27 V.S.A. § 1311)

    Requires disclosure of high-voltage transmission lines or substations near the property that may create electromagnetic fields.

  • Historic Preservation Restrictions (22 V.S.A. Chapter 14)

    Requires disclosure of any historic district designations or preservation restrictions that may limit alterations to the property.

  • Material Defect Disclosure Obligation (27 V.S.A. § 1311; Common Law Duty)

    The general obligation under both federal and state law to disclose any material defect that could affect the property's value or a buyer's decision to purchase, even if not specifically enumerated in other statutes.

Frequently Asked Questions