Selling an Iowa Home: What Are My Disclosure Obligations?

In Iowa, like in many states, the law requires home sellers to reveal to prospective buyers various problems that could affect the property's value or condition. For example, an Iowa home seller cannot fraudulently conceal major defects such as a leaking basement or termite infestation.

If you're selling your Iowa home, what exactly must you disclose, and by when?

Disclosure Law in Iowa for Home Sales

The legal basis for Iowa's disclosure requirement is Iowa Code § 558A, which requires sellers of real estate (no more than four units) to give a written disclosure statement to a person interested in buying the property before that person has made a written offer or the seller has accepted it. The law further requires sellers to send the disclosure statement to the potential buyer either personally, by certified or registered mail, or electronically.

If you're selling your Iowa home and fail to provide the disclosure on time, the property buyer can "withdraw the offer or revoke the acceptance without liability" within three days following personal delivery of the statement or five days following its delivery by mail or electronically. You also have the option of filing the disclosure with the county recorder or clerk—a procedure fairly unique to Iowa. It's not required, however. (See Iowa Code § 558A.2.)

Note that seller disclosures cannot be oral. You are required under this statute to deliver a written disclosure.

Iowa's law also requires that all information in your disclosure be made in good faith and that you amend the disclosure statement if information within it "is or becomes inaccurate or misleading." (See Iowa Code § 558A.3.) This signifies the Iowa legislature's intent to prevent sellers from engaging in unscrupulous conduct or misstatements. So you should not, for example, use sneaky wording to cover up the existence of a defect. Such tactics could expose you to liability if and when the buyer later discovers the truth.

What Issues or Defects Does the Iowa Disclosure Form Cover?

The Iowa Department of Licensing and Regulation has created a standard disclosure form—several pages long—that you, as a home seller, can fill out in order to comply with the law. You'll see that you must certify that the information presented is accurate as of the date of the form, and that the buyer must also sign (as proof of having actually received it).

The disclosure form asks you to state "all known conditions materially affecting the property." It then takes you through different areas of the home and property, such as the roof, basement, sewer system, and so on, and asks you to state "Yes" or "No" whether you are aware of any problems. You are also asked about the presence of environmental hazards, like radon and asbestos.

If you live in a community or development governed by a homeowners' association, you will need to check "yes" to the question of whether the property is "subject to restrictive covenants," sometimes also called CC&Rs. What's more, you'll need to either attach a copy or tell buyers where to obtain one.

The form encourages you to attach additional information or pages, should you need to explain any responses in more detail. This can be useful if you want to alert potential buyers to a known defect (and thus comply with the statute), but then note that the defect is relatively minor (and thus reassure the buyer).

Why Be Thorough and Honest in Making Disclosures About Your Iowa Home?

Any property seller has a natural incentive to say mostly good things about the place that's up for sale. But be careful; lying or concealing issues on your Iowa disclosure form can lead to trouble down the road.

Remember, the Iowa statute requires you to disclose "material" problems concerning your home. Material is understood to mean a problem that would significantly and adversely affecting the property's value, significantly reduce its structural integrity, or present a health risk to its occupants. It does not mean every little scratch on the tile, though nothing would stop you from disclosing such things either, as a way of signaling honesty and openness.

It is highly likely that the home buyer will, eventually, discover any "material" problem. At that point, the Iowa statute gives them a possible legal remedy, saying: "A person [seller] who violates this chapter shall be liable to a transferee for the amount of actual damages suffered by the transferee…."

For example, if you fail to mention a hole in your roof, a termite infestation, or a busted heating system, it will not take long for the buyer to find it after moving in. The buyer could then pursue legal action against you, based on your non-disclosure, to recover the cost of repair. The "good faith" requirement in the Iowa disclosure statute makes this especially likely.

Having said this, you do not need to perform an exhaustive inspection of your Iowa home before submitting your disclosure. The disclosure form requires that you "provide information in good faith and make a reasonable effort to ascertain the required information." Reasonable effort does not mean any extraordinary or costly efforts, nor hiring inspectors to closely check the home for defects. You are required to disclose only problems that you knew about when making the disclosure.

Federal Disclosure Requirements

In addition to Iowa's state disclosure laws, federal law requires sellers of property built prior to 1978 to disclose the existence of lead-based paint on the property. (42 U.S.C.A. § § 4851-56.)

If your house was built before 1978, you will need to:

• supply prospective buyers with a copy of the Environmental Protection Agency's pamphlet "Protect Your Family From Lead in Your Home"
• attach to the contract (or insert in the contract) a "Lead Warning Statement" and a confirmation that you've complied with all notification requirements; and
• provide a 10-day period for the buyer to conduct a paint inspection or risk assessment.

For More Information

If you have questions about what you should disclose and what wording to use, speak to an experienced Iowa real estate agent or attorney.