Sellers and potential buyers of residential real estate in Indiana should familiarize themselves with the requirements of the residential real estate sales disclosure, commonly referred to as the Indiana sales disclosure form. Whether you are selling your house in Indiana or purchasing a home, the residential real estate disclosure form has implications that affect your rights and responsibilities.
What the Indiana Sales Disclosure Form Is and What It Is Not
The Seller’s Residential Real Estate Disclosure form, State Form 46234 (R/1293), or a legally-comparable document used in its place, communicates a home seller’s current knowledge of the condition of the property to potential buyers. The form is not a contract or home warranty. Nonetheless, it is an important document that has legal implications.
An Indiana real estate lawyer can help you complete the form fully and accurately, understand the contents of the seller’s form, and generally navigate legal matters and processes related to buying or selling your home in Indiana.
Selling Your House in Indiana
Generally, anyone selling a one- to four-unit property that is intended for residential use must complete the Indiana sales disclosure form. On the form, the seller must indicate, to his or her knowledge, the condition of the property and any defects related to the following:
- Electrical systems;
- Water and sewer systems;
- Heating and cooling systems;
- Furnace(s), woodstove(s), chimney(s), or flue(s); and
- Structural integrity.
Indiana real estate law defines a defect at Indiana Code § 32-21-5-4 as any condition that will adversely impact property value, the health and safety of residents, or the life span of the property and residence. In addition to defects, home sellers must also disclose the following conditions, if applicable:
- Hazardous conditions or contaminations;
- Zoning, code, or permitting issues;
- Access and easement issues;
- The presence of an airport within one mile of the property;
- Governmental issues;
- Moisture, water, or flood risk;
- Wind damage;
- Infestation of rodents or insects;
- The presence of underground storage tanks; and
- The existence of a homeowner’s association (HOA) that governs the use and sales of the property within its purview.
What Sellers Must Do with the Indiana Sales Disclosure Form
The filing process for the residential real estate disclosure form differs by county. In some counties, a seller must contact the county assessor’s office, while other counties offer online filing. Two different online filing systems are used by the various counties, so it is important to know the sales disclosure filing requirements for the county where your property is located.
Home sellers must provide a copy of the sales disclosure form to potential buyers before accepting an offer for purchase. Upon request, a copy of the form must also be provided to appraisers or inspectors hired by a potential buyer or financer. When a residence is sold, the seller must affirm that the information contained within the disclosure is still accurate to the best of his or her knowledge.
What Home Buyers Should Do with the Indiana Sales Disclosure Form
Home or residential property buyers should examine the residential real estate disclosure form closely. The form may contain information about property conditions that need to be addressed prior to sale or which should factor into the negotiations for purchase of the property. Buyers should not accept the form, however, as a substitute for a professional appraisal and inspection of the property. When changes in the disclosure occur between the time of offer acceptance and closing of the sale, the buyer has the right under Indiana law to withdraw from the purchase.
Seller Liability and the Residential Real Estate Disclosure Form
A seller may be liable to a purchaser for false information provided on the sales disclosure form. However, Indiana Code § 32-21-5-11 states that a homeowner is not liable for errors in the Indiana sales disclosure form under the following conditions:
- The seller did not have knowledge of the error;
- The error was due to inaccurate or incorrect information received by the seller from a licensed professional or agency, which the seller believed to be accurate and correct; and/or
- The seller was not negligent in gathering and providing information from third-parties.
Do You Need an Attorney When Buying or Selling Your House in Indiana?
Court rulings on the liability of sellers related to the residential real estate disclosure form have been mixed in Indiana courts, with much debate regarding what evidence confirms actual current knowledge under the law and when that knowledge is even applicable. In one case, Dickerson v. Strand, the buyer did not obtain a professional inspection before purchasing the property even though the sellers’ inspection had revealed prior termite damage. Despite evidence of attempts by the seller to make related repairs, the court found the sellers’ knowledge of the damage irrelevant. The court held that the buyers had no right to rely on the sellers’ disclosure when they were given an opportunity to obtain a professional inspection and chose not to do so.
Courts have since ruled in direct opposition, however, finding sellers liable when buyers can prove they had actual current knowledge of defects or defective conditions and failed to disclose them. Examples of these cases include Hizer v. Holt and Wise v. Hays. Given these discrepancies, the best way to avoid potential legal conflicts when buying or selling your house in Indiana is to consult with an experienced Indiana real estate lawyer from the early stages of the transaction through sale.
Attorney Corey Meridew of Camden & Meridew P.C. will be happy to help you complete or interpret the Indiana sales disclosure form and navigate the home selling or buying process in a way that protects your rights and assets under the law. Contact us today by calling 317-770-0000 or completing our online contact form.