An Illinois residential real estate purchase agreement (“Contract for Sale and Purchase of Real Estate”) is a contract which commits a buyer to an offer to purchase real estate, according to specific terms agreed by the buyer and seller. Negotiated specifics include the purchase price, financing method, closing date, and more.
Do Sellers in Illinois Have To Disclose Property Defects?
Illinois does require real estate sellers to disclose any material defects with a property. In most cases, this is through a standardized disclosure form provided by statute, but any disclosure which provides the required information is valid.
By mutual agreement, it may be possible to waive the use of a standard form and handle required disclosures another way. However, the seller always has a duty to disclose all material defects that are not obvious on a casual inspection of the property, even if the buyer agrees to take the property “as-is.”
The basic duty to disclose cannot be waived under any circumstances, unless the sale falls under a recognized legal exemption. Illinois exempts the following common transfers, among others, from the disclosure form requirement:
- Court-ordered sales and transfers
- Sales by foreclosure or other debt default
- Transfer as part of the execution of a will or estate
- Transfer to a purchaser who will not use the property for residential purposes
- Transfer to a spouse, parent, or child
- Transfers to or from a government entity
Required Seller Disclosures in Illinois
Illinois sellers of residential real estate must make the following disclosures, as appropriate, in order for a real estate purchase agreement to be considered legally binding:
- Residential Real Property Disclosure: Discloses material defects with a property that are known to the seller at the time of sale, and details any potential issues and conditions that may affect the value of the property. A seller must disclose ALL the information mentioned in the statute.
- Lead-Based Paint Disclosure: Any home constructed earlier than 1978 must come with a disclosure upon the transfer of the property which includes any information about the presence of lead on the premises, as well as educational materials that communicate the health risks associated with lead exposure.
- Radon: Any property sale in Illinois must be accompanied by a form which discloses the status of any known radon hazards on the property. Potential buyers must receive both the Illinois Disclosure of Information on Radon Hazards and the Radon Testing Guidelines for Real Estate Transactions.
Sources
- 1 765 ILCS 77/35
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The disclosures required of a seller by this Act shall be made in the following form:
RESIDENTIAL REAL PROPERTY DISCLOSURE REPORT
NOTICE: THE PURPOSE OF THIS REPORT IS TO PROVIDE PROSPECTIVE BUYERS WITH INFORMATION ABOUT MATERIAL DEFECTS IN THE RESIDENTIAL REAL PROPERTY BEFORE THE SIGNING OF A CONTRACT. THIS REPORT DOES NOT LIMIT THE PARTIES’ RIGHT TO CONTRACT FOR THE SALE OF RESIDENTIAL REAL PROPERTY IN “AS IS” CONDITION. UNDER COMMON LAW, SELLERS WHO DISCLOSE MATERIAL DEFECTS MAY BE UNDER A CONTINUING OBLIGATION TO ADVISE THE PROSPECTIVE BUYERS ABOUT THE CONDITION OF THE RESIDENTIAL REAL PROPERTY EVEN AFTER THE REPORT IS DELIVERED TO THE PROSPECTIVE BUYER. COMPLETION OF THIS REPORT BY THE SELLER CREATES LEGAL OBLIGATIONS ON THE SELLER; THEREFORE THE SELLER MAY WISH TO CONSULT AN ATTORNEY PRIOR TO COMPLETION OF THIS REPORT.
Property Address:……………………………………
City, State & Zip Code:………………………………
Seller’s Name:……………………………………….
This Report is a disclosure of certain conditions of the residential real property listed above in compliance with the Residential Real Property Disclosure Act. This information is provided as of…(month)…(day)…(year). The disclosures herein shall not be deemed warranties of any kind by the seller or any person representing any party in this transaction.
In this form, ” aware” means to have actual notice or actual knowledge without any specific investigation or inquiry. In this form, “material defect” means a condition that would have a substantial adverse effect on the value of the residential real property or that would significantly impair the health or safety of future occupants of the residential real property unless the seller reasonably believes that the condition has been corrected.
The seller discloses the following information with the knowledge that even though the statements herein are not deemed to be warranties, prospective buyers may choose to rely on this information in deciding whether or not and on what terms to purchase the residential real property.
The seller represents that to the best of his or her actual knowledge, the following statements have been accurately noted as “yes” (correct), “no” (incorrect), or “not applicable” to the property being sold. If the seller indicates that the response to any statement, except number 1, is yes or not applicable, the seller shall provide an explanation in the additional information area of this form.
YES
NO
N/A
1…………….Seller has occupied the property within the last 12 months.(If “no,” please identify capacity or explain relationship to property.)
2…………….I currently have flood hazard insurance on the property.
3 …………….I am aware of flooding or recurring leakage problems in the crawl space or basement.
4 …………….I am aware that the property is located in a floodplain.
5 …………….I am aware of material defects in the basement or foundation (including cracks and bulges).
6 …………….I am aware of leaks or material defects in the roof, ceilings, or chimney.
7 …………….I am aware of material defects in the walls, windows, doors, or floors.
8 …………….I am aware of material defects in the electrical system
.9 …………….I am aware of material defects in the plumbing system (includes such things as water heater, sump pump, water treatment system, sprinkler system, and swimming pool).
10 …………….I am aware of material defects in the well or well equipment.
11 …………….I am aware of unsafe conditions in the drinking water.
12 …………….I am aware of material defects in the heating, air conditioning, or ventilating systems.
13 …………….I am aware of material defects in the fireplace or woodburning stove.
14 …………….I am aware of material defects in the septic, sanitary sewer, or other disposal system.
15 …………….I am aware of unsafe concentrations of radon on the premises.
16 …………….I am aware of unsafe concentrations of or unsafe conditions relating to asbestos on the premises.
17 …………….I am aware of unsafe concentrations of or unsafe conditions relating to lead paint, lead water pipes, lead plumbing pipes or lead in the soil on the premises.
18 …………….I am aware of mine subsidence, underground pits, settlement, sliding, upheaval, or other earth stability defects on the premises.
19 …………….I am aware of current infestations of termites or other wood boring insects.
20 …………….I am aware of a structural defect caused by previous infestations of termites or other wood boring insects.
21 …………….I am aware of underground fuel storage tanks on the property.
22 …………….I am aware of boundary or lot line disputes.
23 …………….I have received notice of violation of local, state or federal laws or regulations relating to this property, which violation has not been corrected.
24 …………….I am aware that this property has been used for the manufacture of methamphetamine as defined in Section 10 of the Methamphetamine Control and Community Protection Act.
Note: These disclosures are not intended to cover the common elements of a condominium, but only the actual residential real property including limited common elements allocated to the exclusive use thereof that form an integral part of the condominium unit.
Note: These disclosures are intended to reflect the current condition of the premises and do not include previous problems, if any, that the seller reasonably believes have been corrected.
If any of the above are marked “not applicable” or “yes”, please explain here or use additional pages, if necessary:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Check here if additional pages used:…..
Seller certifies that seller has prepared this report and certifies that the information provided is based on the actual notice or actual knowledge of the seller without any specific investigation or inquiry on the part of the seller. The seller hereby authorizes any person representing any principal in this transaction to provide a copy of this report, and to disclose any information in the report, to any person in connection with any actual or anticipated sale of the property.
(This paragraph shall be printed in boldface type.) THE SELLER ACKNOWLEDGES THAT THE SELLER IS REQUIRED TO PROVIDE THIS DISCLOSURE REPORT TO THE PROSPECTIVE BUYER BEFORE THE SIGNING OF THE CONTRACT AND HAS A CONTINUING OBLIGATION, PURSUANT TO SECTION 30 OF THE RESIDENTIAL REAL PROPERTY DISCLOSURE ACT, TO SUPPLEMENT THIS DISCLOSURE PRIOR TO CLOSING.
Seller:…………………………. Date:…………..Seller:…………………………. Date:…………..
THE PROSPECTIVE BUYER IS AWARE THAT THE PARTIES MAY CHOOSE TO NEGOTIATE AN AGREEMENT FOR THE SALE OF THE PROPERTY SUBJECT TO ANY OR ALL MATERIAL DEFECTS DISCLOSED IN THIS REPORT (“AS IS”). THIS DISCLOSURE IS NOT A SUBSTITUTE FOR ANY INSPECTIONS OR WARRANTIES THAT THE PROSPECTIVE BUYER OR SELLER MAY WISH TO OBTAIN OR NEGOTIATE. (The remainder of this paragraph shall be printed in boldface type.) THE FACT THAT THE SELLER IS NOT AWARE OF A PARTICULAR CONDITION OR PROBLEM IS NO GUARANTEE THAT IT DOES NOT EXIST. THE PROSPECTIVE BUYER IS AWARE THAT THE PROSPECTIVE BUYER MAY REQUEST AN INSPECTION OF THE PREMISES PERFORMED BY A QUALIFIED PROFESSIONAL.
Prospective Buyer:……………… Date:…… Time:….
Prospective Buyer:……………… Date:…… Time:….
Source Link - 2 765 ILCS 77/15
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A seller in any of the following transfers is exempt from this Act, regardless of whether a disclosure report is delivered:
(1) Transfers pursuant to court order, including, but not limited to, transfers ordered by a probate court in administration of an estate, transfers between spouses resulting from a judgment of dissolution of marriage or legal separation, transfers pursuant to an order of possession, transfers by a trustee in bankruptcy, transfers by eminent domain, and transfers resulting from a decree for specific performance.
(2) Transfers from a mortgagor to a mortgagee by deed in lieu of foreclosure or consent judgment, transfer by judicial deed issued pursuant to a foreclosure sale to the successful bidder or the assignee of a certificate of sale, transfer by a collateral assignment of a beneficial interest of a land trust, or a transfer by a mortgagee or a successor in interest to the mortgagee’s secured position or a beneficiary under a deed in trust who has acquired the real property by deed in lieu of foreclosure, consent judgment or judicial deed issued pursuant to a foreclosure sale.
(3) Transfers by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust. As used in this paragraph, “trust” includes an Illinois land trust.
(4) Transfers from one co-owner to one or more other co-owners.
(5) Transfers from a decedent pursuant to testate disposition, intestate succession, or a transfer on death instrument.
(6) Transfers made to a spouse, or to a person or persons in the lineal line of consanguinity of one or more of the sellers.
(7) Transfers from an entity that has taken title to residential real property from a seller for the purpose of assisting in the relocation of the seller, so long as the entity makes available to all prospective buyers a copy of the disclosure report furnished to the entity by the seller.
(8) Transfers to or from any governmental entity.
(9) Transfers of newly constructed residential real property that has never been occupied. This does not include rehabilitation of existing residential real property.
Source Link
