Seller disclosure in Alabama: what a seller must tell

Does Alabama require a seller disclosure form?

Many states publish an official form and a deadline to deliver it. In the Alabama Code sections I read for this guide, I found no such form and no statute that makes a private seller list a home’s defects. The Alabama Real Estate Commission (AREC), the state’s real estate regulator, says on its environmental page only that buyers should research issues such as lead paint, asbestos, radon, underground storage tanks, mold and groundwater contamination, and it points to federal and state health agencies.

That does not make silence safe. A form that a seller or agent chooses to use is a private or trade document, not a state form. This guide does not describe any such form, because no official text sets its content.

Because there is no statutory form, there is also no statutory “cooling-off” period after delivery. Your protection comes from your contract, your inspection and the rules below.

What the law says about agents

Section 34-27-36(b)(3) prohibits a licensee from “making a material misrepresentation or failing to disclose to a potential purchaser or lessee any latent structural defect or any other defect known to the licensee.” The same section limits the rule to defects that “would be a significant factor to a reasonable and prudent person in making a decision to purchase or lease.” Trivial defects do not count.

The rule applies to a licensee who sells his or her own property too: § 34-27-36(b)(2) prohibits dishonest or fraudulent acts when selling, buying, trading or renting real property of the licensee or of a spouse, child or parent.

The penalties under § 34-27-36(a)(2) are:

AREC also keeps a Recovery Fund. An aggrieved party may recover actual or compensatory damages, not including interest and court costs, caused by a broker’s or salesperson’s violation of the license law, under the conditions in § 34-27-31.

What the law says about sellers

Alabama’s fraud statutes apply to everyone, including a private seller:

• A misrepresentation of a material fact that is made willfully to deceive, or recklessly, and that the other party acts on is “legal fraud” (§ 6-5-101). So is an innocent mistake that the other party acts on.
• Suppression of a material fact is fraud when the party is “under an obligation to communicate” it. The obligation “may arise from the confidential relations of the parties or from the particular circumstances of the case” (§ 6-5-102).
• A deceit includes suppressing a fact “by one who is bound to disclose it,” or giving information of other facts that are likely to mislead for want of that fact (§ 6-5-104).

These sections say when an obligation to speak exists only in general terms. Courts decide how they apply to a particular house; I did not read court decisions for this guide. If a seller tells you something about the house, it should be true.

Who is exempt from the license law?

A person selling his or her own home does not need a license (§ 34-27-2(b)(1)), and AREC says Alabama law does not require a licensed broker for an owner’s sale. That exemption covers the license requirement. It does not remove the fraud statutes above.

Federal lead-paint rule for homes built before 1978

Sellers of pre-1978 housing must, under the EPA rule:

1. Disclose any known lead-based paint and lead hazards, and share any existing reports.
2. Give the buyer the EPA pamphlet Protect Your Family From Lead In Your Home.
3. Include a Lead Warning Statement in or attached to the sales contract.
4. Give the buyer 10 days to inspect for lead, unless the buyer waives it or the parties agree to another period in writing.
5. Keep the signed disclosures for three years after the sale.

Failure to comply may bring penalties (EPA). See also home inspection cost for what an inspection adds.

What buyers can do

Read the contract before you sign it. Ask direct, written questions about roof, water, foundation and past repairs, because a false answer to a direct question is a misrepresentation under § 6-5-101. Order an inspection and, for older land or additions, a survey. See the Alabama foreclosure guide if you buy a home out of foreclosure, and the home-buying steps for the full timeline. For a local view, see Birmingham. For legal advice about a specific house, consult an attorney licensed in Alabama.