Selling an Idaho Home: What Are My Disclosure Obligations?

If you're selling your home in the Gem State, you'll need to be mindful of Idaho's real estate disclosure requirements. Sellers of residential property are (with a few narrow exceptions) required by state law to disclose to prospective buyers certain defects or issues with their home that could impair its value. These disclosures must be made before any purchase contract is signed.

Disclosure Law in Idaho for Home Sales

Idaho Statute 55-2501, et seq. mandates that home sellers make certain disclosures to potential buyers within ten days of the date of their offer to purchase your property. As the legislation itself states, its intent is "to promote the public health, safety and welfare and to protect consumers."

Idaho is somewhat unusual in that it codifies the exact language for the disclosure form (Idaho Statute 55-2508). Still, it needs to be formatted. Thus real estate organizations promulgate their own forms, which your agent will give you.

Idaho's form asks a series of questions about the conditions of various aspects of the property. For example, it asks you to state whether you are aware of any problems with respect to the foundation, or electrical, heating, plumbing, or septic systems. You can simply say "No," if that's the case, or explain in greater detail.

You are asked about hazardous materials or pest infestations, and whether you've made any substantial additions or alterations without a building permit.

You are also asked to state whether the major appliances are working properly (such as the stove, water heater, garage door, and so on). Such appliances are expensive, and their condition would be important to the buyer.

Importantly, the codified form includes a question as to whether there are, "Any other problems, including legal, physical or other not listed above that you know concerning the property." This is a catchall; a clear indication that you should not view the form as limiting what you should disclose to the buyer. If there's an aspect of the property that you find irritating or worse, it's probably worth disclosing.

Finally, both you and the buyer will sign the form at the bottom to acknowledge that it was given and received. Needless to say, you should keep a copy for your records.

What Does the Idaho Requirement of Seller "Knowledge" Mean?

The Idaho disclosure form is clear that you are under no obligation to verify any of your disclosures with a formal inspection or engineering report. You need disclose only defects or conditions about which you actually know.

Idaho's disclosure form specifically warns buyers that the seller does not possess any expertise in construction, architectural, engineering or any other specific areas related to the construction or condition of the improvements on the property; and that the seller has not conducted any inspection of inaccessible areas such as the foundation or roof; and that this statement is not a warranty of any kind.

It encourages buyers to obtain their own professional inspections. It additionally notes that other than having lived at or owning the property, the seller possesses no greater knowledge than that which could be obtained by a careful inspection of the property.

All of this language is essentially means that you are under no affirmative duty to, for example, hire a mechanical engineer to ensure that your sewage system is working correctly before submitting the form to a potential buyer. If you do not know about a problem, you do not need to investigate that area of the property prior to sale. That burden is on the buyer.

Why Should You Be Honest In Making Disclosures About Your Idaho Property?

These disclosure requirements can be frustrating. After all, you want to showcase what is best about your home, not what is worst.

Nevertheless, you should not lie or obfuscate on your disclosure statement. Doing so risks a buyer later discovering the defects or conditions in the home before the closing (most likely after conducting a home inspection) and start negotiating for a price reduction and/or repairs, on the theory that, if you didn't know about these issues before, you didn't account for them in the list price. At worst, the buyer might conclude that you lied and start playing hardball in any negotiations.

A buyer who discovers the defects or conditions in the home after the closing could initiate legal action against you. Idaho Statute 55-2517 mandates that any seller who willfully or negligently violates or fails to perform under this law shall be liable in the amount of actual damages suffered by the transferee."

Moreover, the statute mandates that each disclosure be made in good faith.

In short, no funny business. Idaho's legislature is trying to prevent a situation where a seller uses half-truths or omissions to trick a buyer into purchasing a property with unforeseen defects. This requirement of good faith gives the buyer another avenue of legal liability against you, should you decide to be sneaky or evasive in your disclosure.

The buyer might choose to hire an attorney to sue you for breach of contract, fraud, or breach of the provisions of this statute. Even if you also hire an attorney to defend you, this will ensnare you in costly and time-consuming litigation when you would like the thoughts of your old Idaho home to be behind you. Being honest on your disclosure form serves as a protection for you as much as it does for the buyer.