Disclosure, Due Diligence, and Consumer Protection
Required disclosures
- Agency disclosure at first substantive contact or as state law specifies, in writing.
- Seller's property condition disclosure: known material defects, water intrusion, structural issues, unpermitted work, litigation, HOA problems. An "as-is" sale shifts repair responsibility but generally does not cancel the duty to disclose known latent defects.
- Federal lead-based paint rule: for pre-1978 housing, disclose known lead hazards, deliver the EPA pamphlet, and allow a 10-day inspection opportunity unless the buyer waives it.
- Megan's Law: many states bar agents from volunteering sex-offender information; refer buyers to the official registry.
- Flood zone status, HOA or condo budgets, reserves, special assessments, and insurance claims history.
Due diligence
Inspection, title, survey, environmental, zoning, and financing contingencies each carry deadlines. The final walk-through confirms condition; it is not a new inspection right. Put every document request in writing and log it.
Worked example
A seller paints over basement staining and states "no water problems." The buyer's inspector notes efflorescence. The seller's statement misrepresents a known material fact, and an agent who repeats it without verification is exposed too. The buyer may have rescission or damages remedies despite an as-is clause, because as-is does not license fraud.
Traps that cost marks
- Assuming stigmatized-property events (crime, suicide) must always be disclosed - rules vary by state.
- Confusing the agent's duty to disclose material facts with a duty to diagnose defects.
- Missing that lead-based paint disclosure is federal and applies regardless of local custom.