Seller disclosure requirements in Connecticut

Is a disclosure form required by law?

Yes. Section 20-327b says each person who offers residential property in Connecticut for sale, exchange or lease with an option to buy must give the prospective buyer a written residential condition report before the buyer signs any binder, contract, option or lease with a purchase option.

The law covers transfers of residential property with one to four dwelling units, including cooperatives and condominiums. It applies whether or not a licensed broker is involved. The buyer’s written receipt must be attached to any written offer, binder or contract, and the signed report must be attached to the purchase agreement.

The Commissioner of Consumer Protection prescribes the form templates. The statute sets the contents and order of the questions, so the form is the same for every seller. It tells sellers to answer all questions “to the best of your knowledge” and says your real estate licensee cannot complete the form on your behalf.

What the form covers

The statute lists the sections of the report. Each question has yes, no, not applicable or unknown boxes.

Several questions ask the seller to attach reports, such as a foundation inspection or a radon test. The form ends with a seller’s certification and a buyer’s certification. Printed notices on the form say it is not a warranty, is not a substitute for inspections, and does not relieve a broker of the duty to disclose material facts.

Exemptions

Section 20-327b exempts, among others:

• transfers solely between co-owners
• transfers to a spouse or close relative where no consideration is paid
• newly built homes covered by the state’s implied warranty for new construction
• transfers by executors, administrators, trustees or conservators
• transfers by the federal government, the state, and (with exceptions) towns
• most transfers of property acquired by foreclosure or a deed in lieu of foreclosure

The foreclosure exception has a limit. In towns that the Capitol Region Council of Governments determines are affected by crumbling foundations, an owner who acquired a home through foreclosure must give a shorter “Residential Foundation Condition Report” about pyrrhotite, damage and repairs.

What happens if a seller does not disclose

There are two consequences.

The $500 credit. Every Connecticut purchase agreement covered by the law must say the seller credits the buyer $500 at closing if the seller does not furnish the report (§ 20-327c(a)).

A lawsuit for serious defects. The credit does not excuse the seller from disclosing a defect that is within the seller’s actual knowledge and that significantly impairs the property’s value, the health or safety of future occupants, or the home’s useful life. A buyer may sue in the judicial district where the property sits to recover actual damages (§ 20-327c(b)-(c)).

Three limits matter. The report does not create any warranty (§ 20-327d). The seller is not required to order inspections or tests (§ 20-327d). And the seller’s statements extend only to the seller’s actual knowledge, with no constructive knowledge imputed (§ 20-327e). That is why a buyer should still order a home inspection, which the form itself recommends.

A seller who gives written notice that lists of hazardous waste facilities and of nearby hunting or shooting-sports properties are available is treated as having met the duty to disclose those items (§§ 20-327f and 20-327g).

Federal lead-based paint rule (homes built before 1978)

For most housing built before 1978, federal law requires sellers and agents, before the buyer is bound by a contract, to give the buyer the EPA pamphlet “Protect Your Family From Lead In Your Home”, disclose known lead-based paint and hazards, provide available records and reports, and include a Lead Warning Statement in the contract. Buyers get a 10-day period to inspect for lead-based paint, which the parties may shorten or lengthen in writing or the buyer may waive. Sellers and agents must keep a signed copy for three years. The rule does not apply to housing built after 1977 or to foreclosure sales (EPA).