15 Oct The Pennsylvania Seller’s Property Disclosure Statement, Explained
In Pennsylvania, if you sell a house, a condominium unit or a building with up to four units, you must give the buyer a signed and dated Seller’s Property Disclosure Statement before the agreement of sale is signed, unless your sale is exempt. The statement lists the material defects you know about. The law asks what you know, not what an inspector would find.
Here’s what the form covers, what counts as a material defect, when the buyer gets it, and what to do if something changes before settlement.
What is the Seller’s Property Disclosure Statement?
It’s the written statement Pennsylvania’s Real Estate Seller Disclosure Law requires from sellers of residential property. The State Real Estate Commission sets what the form must cover, at a minimum. The form your agent gives you may ask more questions than that, and the law allows it.
It isn’t a warranty. The state’s form says so, and adds that it reports what you know as of the day you sign it and isn’t a substitute for any inspection the buyer may want.
Who has to fill one out?
The law covers the transfer of a property with one to four residential units. That includes a sale, an exchange, an installment sale, a lease with an option to buy, and the transfer of a condominium or cooperative unit.
Some transfers are exempt. They include:
- A transfer by a fiduciary, such as an executor, administrator, guardian or trustee, in the course of administering an estate, guardianship, conservatorship or trust.
- A new home nobody has lived in, when the buyer gets a written warranty of at least one year, the home was inspected for building code compliance, and a certificate of occupancy or code compliance was issued.
- Other transfers the law lists, such as court-ordered transfers, foreclosure sales and deeds given in place of foreclosure, transfers between co-owners, sales of land with no buildings, and sales to a buyer who will demolish the building or convert it to a non-residential use.
- Transfers to a spouse, including under a divorce or separation decree, and transfers to a relative in a direct line, such as a parent, grandparent, son or daughter. A sale to a sibling, cousin or in-law isn’t on the list.
Selling a house “as is” isn’t one of the exemptions. An as-is sale still needs the statement. If you think your sale is exempt, confirm it with a real estate attorney before you skip the form.
What does the form ask about?
The state’s form covers these subjects:
- Your expertise, if any, in contracting, engineering, architecture or other construction-related fields, and whether you live in the house
- The roof
- The basement and crawl space, including water and dampness
- Termites and other wood-destroying insects, dry rot and pests
- Structural problems, including water leakage and movement in walls or foundations
- Additions, remodeling and other structural changes
- Water supply and sewage
- Plumbing
- Heating and air conditioning
- The electrical system
- Equipment and appliances included in the sale
- The land: soils, drainage, flooding, boundaries and sinkholes
- Hazardous substances, such as underground tanks, asbestos, radon or lead paint
- Condominium and homeowners association details, if your home is in one
- Storm water facilities, and who is responsible for maintaining them
- Legal matters: lawsuits, code violations, unpaid assessments, liens and title problems
- Any other material defect the form doesn’t cover elsewhere
Several questions ask about the past as well as the present. The structural section asks about past or present water leakage, and the pest section asks about reports or treatments in the last five years. Where the form asks you to describe a problem or a repair, it asks for the location, the extent, the date and who did the work, if known.
What counts as a material defect?
Pennsylvania law defines a material defect as a problem with the property, or any part of it, that would have a significant adverse impact on its value or that involves an unreasonable risk to people on the property.
Age alone doesn’t make something a material defect. The law says a structural element, system or subsystem that is near, at or beyond the end of its normal useful life is not, by itself, a material defect. An older furnace that works isn’t a defect because of its age. If you know it doesn’t work, that’s a problem the form asks about.
When does the buyer get it?
Before the agreement of sale is signed. The law requires a signed and dated copy to be delivered to the buyer before you and the buyer sign the agreement. The form has a section where the buyer signs to acknowledge receiving it.
Fill it out before you list, so it’s ready when a buyer is.
You can amend the statement in writing until the agreement of sale is signed. And if something you disclosed stops being accurate before settlement, the law requires you to tell the buyer, and the state’s form says to do it in writing. Say a storm causes a roof leak after you’re under contract: the buyer needs to hear about it from you before settlement.
Do you have to inspect the house before you fill it out?
No. The law says you aren’t required to make any specific investigation or inquiry to complete the statement. What it does require is that you not make statements that you or your agent know, or have reason to know, are false, deceptive or misleading, and that you not leave out a material defect you know about.
If you don’t know an answer, the law lets you answer based on the best information available to you. Some questions on the form have an “unknown” box. Use it when it’s true, not to skip a question you can answer.
What if you didn’t know about a problem?
The law protects sellers in three situations. You aren’t liable for an error, inaccuracy or omission in the statement if any one of these is true:
- You had no knowledge of it.
- It was based on a reasonable belief that the problem had been fixed.
- It was based on information from a public agency, a home inspector, a contractor or certain other licensed professionals about matters within their field, and you didn’t know the information was wrong.
The other side is real too. A seller who willfully or negligently fails to do what the law requires can be liable for the buyer’s actual damages, and under this law the buyer has two years from final settlement to bring that claim. A sale isn’t undone just because the law wasn’t followed, but the claim can still cost you.
Disclosure also works in your favor. Under this law, a buyer has no claim over a material defect you disclosed before the agreement of sale was signed.
What does your agent do, and what do you do?
Your listing agent must explain your responsibilities under the disclosure law and give you a copy of the form. The answers are yours. The state’s form says the seller alone is responsible for the accuracy of the information in it.
What about lead-based paint?
If your house was built before 1978, a separate federal rule applies on top of the state form. Before the buyer signs the agreement of sale, you must:
- Give the buyer the federal lead hazard pamphlet.
- Disclose any lead-based paint or lead-based paint hazards you know about.
- Provide any records or reports you have on lead-based paint or lead-based paint hazards in the house.
- Include the Lead Warning Statement in, or attached to, the agreement of sale.
You must also give the buyer 10 days to have a lead-based paint inspection or risk assessment done before the buyer is bound by the agreement. You and the buyer can agree in writing to a longer or shorter period, and the buyer can waive it in writing.
Keep a signed copy of the lead disclosure for at least three years after the sale closes. Some sales are exempt, such as foreclosure sales. If you have a report from a certified inspector finding the house free of lead-based paint, give it to the buyer with your other records.
What if you’re selling a condominium or co-op unit?
For a condominium or cooperative unit, your disclosure statement covers your own unit. The disclosure law doesn’t require you to disclose about the common elements. The association’s resale certificate covers those.
The buyer can cancel the agreement and get the deposit back until the resale certificate has been provided and for five days after, or until settlement, whichever comes first. Order the certificate as soon as you decide to sell.
How do you get the form right?
- Start before you list. Give yourself time to find dates and records.
- Pull your paperwork. Repair invoices, permits, warranties, the roof’s installation date, pest reports or treatments from the last five years, and septic service records or water test results if you have them.
- Answer every question that applies. Describe facts: what happened, where, when, and who did the work.
- Don’t guess. If you don’t know, check “unknown” where the form offers it, or answer from the best information available to you.
- Put changes in writing. If anything changes before settlement, tell the buyer.
The disclosure statement is one of several documents to prepare before you list. For the costs side of a sale, see What It Costs to Sell a House in the Philadelphia Suburbs.
This is a general explanation of the rules for Pennsylvania sellers, not legal advice. If a question on the form is hard to answer, ask a real estate attorney.
Frequently asked questions
Do I need a disclosure statement if I’m selling as-is?
Yes, unless your sale is exempt. Selling as-is isn’t one of the exemptions in the law.
What if I don’t live in the house?
You still complete the statement based on what you know. The form asks whether you live there and, if not, when you last did. If you’re selling as an executor or trustee administering an estate or trust, the sale may be exempt; confirm it with a real estate attorney.
Can I fix a problem instead of disclosing it?
You can fix it, but several questions on the form ask about past problems and repairs, not only current ones. Answer them, and describe what was done, where, when and by whom.
How long does a buyer have to bring a claim?
Under the Real Estate Seller Disclosure Law, a buyer has two years from final settlement to bring a claim for damages. Claims under other laws, such as fraud, can have different deadlines.
Thinking about selling?
Your disclosure statement is yours to complete, and it goes faster with your records in front of you. If you’re thinking about selling in Philadelphia or the Philadelphia suburbs, we’ll give you the form, go through what each section asks, and build a net sheet for your house. Any value range we give you is a broker price opinion, and a broker price opinion is not an appraisal. Contact Plus Realtors and tell us where your home is.