Property Sellers - What You Need to Know about the Illinois Real Property Disclosure Act
If you have bought or sold a home in the State of Illinois since 1998, you may be familiar with today’s topic. We are talking about the Residential Real Property Disclosure Act, an Illinois statute enacted in 1998 to protect home buyers. This Act was intended to prevent home sellers from intentionally failing to report the condition of a property accurately in order to sell it. Under the law, sellers must complete a form that provides a reliable representation of the major conditions of a residential property. This form, provided to buyers before closing, gives the buyers a full and accurate picture of the home they are choosing to buy.
Who is Required to Comply with the Real Property Disclosure Act?
Under the 1998 Act, every residential property sold in the State of Illinois is subject to this disclosure requirement. This includes single family homes (with up to four units), condominiums, co-ops, etc. It even includes lease options and land contracts, too. It does not cover new construction that has never been occupied, commercial properties, or certain circumstances in which residential properties are transferred, including foreclosure sales, sales due to divorce, probate, or bankruptcy, or transfers between co-owners.
The statute provides that “every person or entity who is an owner, beneficiary of a trust, contract purchaser or lessee of a ground lease, who has an interest (legal or equitable) in a residential property” is required to complete the disclosure form.
What Conditions am I Required to Disclose?
When completing a reporting form for real property disclosures, there are twenty-three specific questions to buyer must answer. Among others, this includes:
❏ Whether there has been any flooding or leakage in the basement of the property
❏ If the property is on a flood plain or the current owner has flood insurance
❏ Whether the roof, chimney, or ceilings have leaks
❏ Whether there are defects to the
❏ Electrical system
❏ HVAC System
❏ Fireplace or woodburning stove
❏ Septic and sewer
❏ Whether the drinking water is safe
❏ Whether radon levels and asbestos conditions are safe
❏ Whether there is lead paint, pipes, or soil contamination on the property
❏ If the residence is settling or on unstable earth
❏ Whether there are wood boring insects (currently or damage from past infestations)
❏ If the property conditions violate any laws
❏ If there are underground fuel tanks
❏ Whether there have been any boundary line disputes
❏ Whether the property was ever used to manufacture methamphetamine
To view the full form, click here. If any of these conditions existed in the past but have been corrected, there is no need to disclose former conditions, as long as the seller reasonably believes these problems have been mitigated. The form is meant to reflect the property’s current condition. However, to be safe, a seller may choose to fully disclose any current or former conditions and also describe how previous problems were mitigated.
What if the Form is Not Completed or All Conditions are Not Disclosed?
If the form is not completed and provided to the buyer before closing, the buyer is entitled to cancel the contract. If the sale does close without the fully completed form being provided to the buyer, the seller is presumptively liable for violation of this Act. That means, if the buyer does experience any problems with conditions on the property, he or she may sue the seller and would only need to prove damages, not fault.
Some buy/sell agreements for real estate are done “as is,” meaning the buyer agrees to purchase the property in its current condition, regardless of any problems the property may have. Does this exempt the seller from completing the property condition disclosure form? No. Even when a property is being sold, “as is,” the seller is still required to disclose any and all known conditions on the property.
Concerned about How the Property Disclosure Act May Impact Your Illinois Real Estate Transaction?
Work with an experienced, dedicated Illinois real estate attorney – Alexis Hart McDowell. At Enterprise Esquire, we work with both buyers and sellers on a regular basis. Our personalized, affordable, top quality legal services are designed to protect you and your business, no matter the circumstance. If you are considering selling a property in the State of Illinois and would like to learn more about the Residential Real Property Disclosure Act, schedule a FREE consultation today.