Selling a home involves more than setting a price and signing a purchase agreement. Indiana law generally requires sellers of residential property containing no more than four dwelling units to complete a Seller’s Residential Real Estate Sales Disclosure form.
The form addresses the seller’s current knowledge of the property and must generally be provided to the prospective buyer before an offer is accepted.
Indiana Residential Real Estate Disclosure Requirements
The required document is the Seller’s Residential Real Estate Sales Disclosure, State Form 46234. Sellers should use the current version of the form published by the State of Indiana.
The seller must complete and sign the form before submitting it to the buyer. Before closing, an accepted offer generally is not enforceable against the buyer until the seller and buyer have signed the disclosure form.
This timing matters. Providing the form during the inspection period or shortly before closing may be too late.
What Does the Disclosure Form Cover?
The disclosure form asks about the seller’s knowledge of many parts of the home and property. These areas generally include:
- The foundation and structure
- The roof and known leaks
- Electrical systems
- Plumbing, water, and sewer systems
- Wells and septic systems
- Heating and cooling equipment
- Appliances included with the sale
- Basement or crawl space moisture
- Flooding and flood plain information
- Termite, insect, or rodent damage
- Mold, radon, asbestos, lead paint, and other hazardous conditions
- Building code, zoning, or permit concerns
- Property encroachments and shared access
- Homeowners association requirements and assessments
- Historic district status
- Conservation easements
- Proximity to an airport or military installation
- Known controlled substance contamination or methamphetamine activity
A seller should read each question carefully and provide additional details when a simple response does not fully explain the condition.
Do Sellers Have to Inspect the Property?
The disclosure form is based on the seller’s current actual knowledge. Sellers are generally not required to conduct a new inspection simply to complete the form.
If information is genuinely unknown or unavailable, the seller may state that it is unknown. However, a seller should not select “unknown” to avoid disclosing a condition they already know about.
Past repairs, recurring problems, inspection reports, insurance claims, permits, and professional evaluations may be relevant when completing the form. Sellers should review the records they have rather than relying entirely on memory.
Indiana law may protect a seller from liability for information that was outside the seller’s actual knowledge. Protection may also apply when the seller reasonably relied on information supplied by a public agency or qualified professional and was not negligent in obtaining or communicating that information.
Does an As Is Sale Remove the Disclosure Requirement?
Selling a home as is does not automatically eliminate Indiana’s disclosure requirement. An as is provision may address the buyer’s acceptance of the property or the seller’s responsibility for repairs, but it does not permit a seller to provide false information about a known defect.
The Indiana Supreme Court has held that a seller may be liable for fraudulent statements on a disclosure form when the seller knew the statement was false when the form was completed.
Must Sellers Report Changes Before Closing?
The seller’s responsibility does not necessarily end when the original form is delivered. If the physical condition of the property changes before settlement, the seller must disclose any material change or certify at settlement that the property remains substantially the same as it was when the form was provided.
For example, a new roof leak, plumbing failure, flooded basement, or furnace breakdown may need to be disclosed if it occurs before closing.
If a buyer receives a disclosure form or amended form after an offer has already been accepted and the form reveals a defect, the buyer may have two business days to cancel the contract in writing and recover any deposits.
Is the Disclosure Form a Warranty?
The seller disclosure form is not a warranty. It reports the seller’s knowledge of the property but does not guarantee that every component will remain free from problems.
The form also does not replace a professional home inspection. Buyers should consider independent inspections and include appropriate inspection terms in the purchase agreement.
Are Any Property Transfers Exempt?
Indiana law identifies several transfers that may be exempt from the disclosure requirement. Examples include:
- Certain transfers ordered by a court
- Foreclosure sales
- Certain transfers made during estate, guardianship, or trust administration
- Transfers between co owners
- Certain transfers to a spouse or direct family member
- Transfers involving a governmental entity
- The first sale of a dwelling that has never been inhabited
- Transfers to a living trust
The exact parties and method of transfer determine if an exemption applies. A foreclosure, divorce, inherited property, or trust connection does not automatically make every related sale exempt.
What Happens If a Seller Fails to Disclose a Known Defect?
A seller who knowingly provides false information or conceals a required disclosure may face a claim from the buyer. A dispute may involve fraudulent misrepresentation, repair expenses, loss in property value, contract rights, or other damages.
Evidence in a disclosure dispute may include:
- The completed disclosure form
- Inspection and repair records
- Contractor invoices
- Photographs and videos
- Insurance claims
- Emails and text messages
- Statements made during the transaction
- Evidence of prior water, structural, or mechanical problems
Buyers who discover a possible concealed defect should preserve the property condition and related records before beginning major repairs. Sellers who receive a demand or lawsuit should avoid altering or discarding transaction records.
Legal Guidance for Indiana Buyers and Sellers
Podlaski Attorneys advises buyers and sellers on purchase agreements, disclosure concerns, and disputes involving residential property. Our attorneys can review the disclosure form, transaction documents, inspection findings, and communications to help determine the appropriate next step.
Learn more about our real estate transaction services or contact our team to request a consultation.
