Buying a Colorado Home: What Does the Seller's Disclosure Form Tell Me?
What Colorado law requires sellers to disclose, and how buyers can intelligently use this information.
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When buying a home in Colorado, you (and your lender) will want to know as much as possible about the condition of the property. A home is a big investment and any negative conditions or defects found there might negatively impact its value. Property defects aren’t always obvious to the non-expert visitor, however. A seller might share certain information voluntarily, but sellers have a natural incentive to be less than forthcoming, fearing that you’ll walk away from the property or demand a reduced price for repairs.
Colorado provides some protection to buyers by requiring sellers to tell them, up front, about certain specified conditions on the property being sold. Armed with a disclosure form filled out by the seller, a home inspection (at least one), and a personal visit to the property, a buyer should be able to make a well-informed decision about the quality of the property being purchased.
For corresponding information concerning seller disclosure laws, please see the article, “Home Sellers in Colorado: Your Disclosure Obligations.”
How Colorado’s Disclosure Laws Help Home Buyers
As a buyer, you are protected by Colorado state statutes requiring that sellers of residential property disclose, at a minimum, the following:
- if true, that the property is part of a common interest community, which the buyer will be obligated to become a member of and pay assessments to (see the Colorado Revised Statutes Annotated “C.R.S.A.” § 38-35.7-102)
- if true, that the property has been used as a methamphetamine laboratory, unless it has been fully remediated (C.R.S.A. § 38-35.7-103)
- the home’s source of potable (drinkable) water (C.R.S.A. § 38-35.7-104)
- any proposed transportation projects (such as a light rail project) that may affect the property (C.R.S.A. § 38-35.7-105), and
- that the property may be in a special taxing district, and where the buyer can go to find out whether the property is, in fact, within such a district (C.R.S.A. § 38-35.7-101).
In addition to state law, every homebuyer across the U.S. needs to comply with any applicable federal law. For example, for any property built prior to 1978, the seller must disclose the existence of lead-based paint on the property. (42 U.S.C.A. §§ 4851-56.)
Further, sellers’ brokers have certain disclosure obligations, which are discussed in the article, “Required Broker Disclosures When Selling a Home in Colorado.”
What's Found in the Colorado Home Seller's Disclosure Form
The good news for buyers is that the Colorado Real Estate Commission has created a standardized form for sellers’ use in making disclosures, called the Seller’s Property Disclosure (Residential). Sellers are not required to use this form, but most do to ensure they are complying with the law. As a buyer, you can expect to see this completed form (or something similar) not later than the date indicated in your real estate purchase contract.
The standard seller’s property disclosure form asks the seller to make the state-required disclosures (listed above), provides a checklist of items for seller to describe the condition of or comment on, such as appliances, systems (electrical, heating, plumbing, roof, structure, and the like), and has space for sellers to supply other information, such as the existence of boundary disputes or zoning violations.
You will want to read it carefully, looking for any issues that warrant asking further questions of either the sellers or your home inspector. Many buyers don’t realize that it’s okay to ask the seller’s broker questions, such as, “This says there was a mold problem—can you show us where it occurred?”
The standard seller’s property disclosure form is not a warranty. For example, if the seller indicates the oven is functional, it does not guarantee if will continue to be functional for any period of time. Consider asking the seller for any user manuals or certificates of warranty for appliances or fixtures on the property to be left with the home.
What the Seller Disclosure Form May Leave Out
The purpose of the disclosure form is for the seller to inform buyers of known conditions on the property. What that means for buyers is that a seller isn’t required to disclose facts that the seller hasn’t investigated, or even about which the seller “should have known.” After many years living in a property, the seller can become blind to issues there.
For example, if the buyer had heard a faint hissing sound coming from the crawl space for several weeks but hadn’t opened the door to reveal the lake created by leaking pipes, the buyer shouldn’t expect to see anything about that issue on the disclosure form. The seller could rightly check the “Do Not Know,” option in response to any related questions on the standard seller’s property disclosure form. The buyer should be sure to have a professional inspector follow-up on those items, where possible.
Further, the seller’s property disclosure form will not give the buyer notice of any neighbor disputes associated with the property. (Nor will the professional inspection, described next.) For example, the seller would not be required to disclose that the reason for the move was the neighbors’ habit of throwing wild parties every Friday night. If feasible, a buyer should take a walk around the neighborhood and talk with neighbors to sound them out on quality of life in the neighborhood.
Seller Disclosures Are No Substitute for a Professional Home Inspection
The buyer should arrange for at least one professional inspection of the property. (This will also likely be required by a lender.) The inspector may recommend additional inspections by specialists such as an engineer or swimming pool expert.
It is highly unlikely that the property will be free of defects. Don’t be shocked if and when the inspection report comes back with a list of issues that the seller never told you about. It doesn’t necessarily mean that the seller was dishonest, only that a house is a complex system and it takes a professional to ferret out all (or at least most of) its problems.
Finally, the buyer should visit the property to determine whether the buyer’s opinions match the seller’s property disclosure form and the results of the professional inspection.
More Information on Colorado Real Estate Disclosure Laws
For Colorado real estate disclosure forms, other form documents (including sales contracts) and additional information, see the state Division of Real Estate website at www.colorado.gov/DORA. Be sure to consult with an attorney if you have legal questions related to your home purchase.