Real Estate Term of the Day: Disclosure Statement
DISCLOSURE STATEMENT – a statement required by law, in which sellers of particular kinds of property, or under certain circumstances, must reveal specified information to potential buyers (Barron’s Dictionary of Real Estate Terms)
According to the Colorado Exclusive Right-to-Sell Listing Contract (Section 18.2 SELLER’S OBLIGATIONS); the disclosure by the seller of known material latent (not obvious) defects is required by law. A seller is not required by law to provide a written disclosure of adverse matters regarding the Property. However, full disclosure of the property is strongly advised. Failure to disclosure a known material defect may result in legal liability.
In the State of Colorado, we use 4 forms for disclosure purposes:
- Seller’s Property Disclosure – Used to disclose latent defects & other information about the home/property
- Lead-Based Paint Disclosure – If the home was built before 1978
- Square Footage Disclosure – Used to disclose the square footage of the home and how that measurement was determined
- Source of Water Addendum – The disclosure of the source of potable water for the property