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States that require formal disclosure by sellers

At least 32 states require some type of formal seller disclosure, according to the National Association of Realtors.

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They are: Alaska, Arizona, California, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Michigan, Mississippi, Nebraska, Nevada, New Hampshire, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Virginia, Washington and Wisconsin.

All disclosure forms generally cover in great detail the legal, structural and environmental condition of a property prior to sale. But often, regional concerns pop up in state-to-state required disclosures.

For instance, earthquake hazard disclosure is required in California, but not in New York or in most of the Midwest.

Many western states require wildfire hazard disclosure; eastern states typically do not.

Alaska wants to know if you've ever sustained avalanche or permafrost damage, while Hawaii is interested in erosion from mudslides or volcanic activity.

Some states, South Carolina and Tennessee, for example, ask about nuisances (noise, smoke, odors) associated with living in the house that the buyer may not discover until it's too late. This should tip off the prospective buyer about the dog that barks all night and the garage band across the street.

In Alaska, they're even more specific. Possible nuisances spelled out for sellers to reveal include "airplanes, trains, dogs, traffic, racetracks and neighbors."

Sometimes fashionable building materials find their way into disclosures. Tennessee, for instance, wants you to come clean if you fell for the "synthetic stucco" craze a few years back.

States have generally been reluctant to get too specific on the touchy subject of "stigmatized" houses, that is, haunted properties or scenes of murders or suicides. But in California, which has seen its share of ghostly listings, scandal has an expiration date: Sellers don't have to disclose a murder or other stigmatizing occurrence if it took place more than three years ago.

Few expect seller disclosure requirements to ever apply nationally. Real estate has traditionally been regulated at the state level where its licensing fees contribute to the general fund.

But because the industry is very good at sharing best practices across state lines, Craig Cheatham, executive vice president of the Association of Real Estate License Law Officials, says a de facto national standard for seller disclosure is probably inevitable.

"You used to have two or three states that were basically still caveat emptor, but New York just recently abandoned that. Now Alabama and Minnesota are the two that are left. The trend is toward more uniformity.

"The crux of it is, in which of these states are the courts going to say, 'You should have known.'"

Jay MacDonald is a contributing editor based in Mississippi.

Bankrate.com's corrections policy
-- Posted: Sept. 20, 2005
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