Property Disclosures: Practice Questions & Explanations

The federal Residential Lead-Based Paint Hazard Reduction Act of 1992 (Title X) requires that sellers and landlords of residential property built before 1978 disclose any known lead-based paint or lead hazards, provide a copy of the EPA pamphlet 'Protect Your Family from Lead in Your Home', and give buyers a 10-day opportunity to inspect for lead before becoming obligated under the contract. The pre-1978 date matters because lead-based paint was banned for residential use that year. The seller does not have to test for lead, only disclose what is known. Failure to comply can result in significant federal fines. The disclosure must be a separate document attached to the contract, signed by all parties.

The federal Fair Housing Act (1968, as amended) prohibits discrimination in housing on the basis of race, color, religion, sex, national origin, disability, and familial status (presence of children under 18). HUD has interpreted 'sex' to include gender identity and sexual orientation. Marital status and age are not federally protected in housing contexts, though some state and local laws do protect these classes. Real estate agents must treat all clients equally regardless of protected-class status: showing the same homes, offering the same financing options, providing the same level of service. 'Steering' (directing buyers to or away from certain neighborhoods based on protected-class characteristics) and 'blockbusting' (inducing sales by suggesting protected-class neighbors will move in) are illegal.

Material defects known to the seller must be disclosed to buyers under most state laws. A basement that floods is a material defect because it affects the property's value, habitability, and safe use. Most states require a written property disclosure form listing known defects (water damage, foundation issues, roof problems, septic issues, prior repairs, environmental hazards). Concealing a known defect can expose the seller and even the listing agent (who has a duty to make sure the disclosure is complete) to lawsuits and license discipline. 'Caveat emptor' (buyer beware) is significantly weakened in modern real estate law for residential transactions; sellers cannot hide problems they know about. Honest disclosure also protects the seller — once disclosed in writing, the buyer cannot later sue for a defect they were told about.

The federal Residential Lead-Based Paint Hazard Reduction Act requires that for most housing built before 1978, sellers and landlords disclose any known lead-based paint and lead hazards, provide buyers or tenants with the EPA pamphlet on lead, include a lead warning statement in the contract, and give purchasers a 10-day period (which can be changed by mutual agreement) to conduct a lead inspection or risk assessment. The 1978 cutoff reflects the year residential lead paint was banned. Agents must ensure these disclosures are made. This is a frequently tested federal disclosure requirement on the national portion.