Selling an Idaho Home: What Are My Disclosure Obligations?

What home sellers in Idaho should know about their state's law on disclosures to buyers about the home's condition.

If you’re selling your home in the Gem State, you’ll need to be mindful of Idaho’s disclosure requirements. Sellers of residential property are required by state law to disclose to prospective buyers certain defects 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 you must make certain disclosures to potential buyers within ten days of the date of their offer to purchase your property. As the legislation itself states, the intent of the statute is “to promote the public health, safety and welfare and to protect consumers [by requiring] sellers of residential real property… to disclose certain defects in the residential real property to a prospective buyer.”

Idaho is somewhat unusual in that it codifies the entire disclosure form, which is relatively short compared to other states, within the legislation.  Idaho Statute 55-2508  contains the entire text of the disclosure form that you must provide to the buyer, including all of the questions you must answer.

Many other real estate agents promulgate  sample disclosure forms, which include all of the required information (and sometimes even more than what is required). Making disclosures beyond the requirements can sometimes be helpful to put buyers at ease, particularly if you do not have anything to hide. After all, many sellers are legitimately not aware of material defects in their home, which may be hidden in the roof or foundation—at least not defects so severe that they could jeopardize a sale.

Idaho’s  codified form—which is only about two pages—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, electrical system, heating, plumbing, or septic system. You can simply say “No,” if that's the case, or you can explain in greater detail.

You are also asked to state whether there are defects with respect to any of the major appliances (such as the stove, water heater, garage door, and so on). Obviously, such appliances are expensive, and their condition would be important to the buyer. You must also state whether you are aware of any hazardous materials or pest infestations in the home.

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 now 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 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 very 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 states 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. [Moreover] the Seller has not conducted any inspection of generally inaccessible areas such as the foundation or roof. It is not a warranty of any kind by the Seller or by any agent representing any Seller in this transaction. It is not a substitute for any inspections. Purchaser is encouraged to obtain his/her own professional inspections.”

Idaho Statute 55-2507 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 Home?

Like any seller, you are probably thinking that these disclosure requirements are 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. If you do, you risk that a buyer will discover 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.

If the buyer discovers the defects or conditions in the home  after  the closing, he or she may initiate legal action against you.  Idaho Statute 55-2517  mandates that “any person who willfully or negligently violates or fails to perform any duties prescribed by any provision of this chapter shall be liable in the amount of actual damages suffered by the transferee.” In plain English, this means that the buyer could sue you for, perhaps, the actual cost of fixing whatever defects you failed to properly disclose.

Moreover,  Idaho Statute 55-2516  mandates that “Each disclosure required… shall be made in good faith. For the purposes of this chapter, good faith means honesty in fact, in the conduct of the transaction.”

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.

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