Minnesota seller disclosure: what sellers must tell buyers

Is a disclosure required by law?

Yes. The law covers the transfer of any interest in residential real estate: a sale, exchange, deed, contract for deed, or lease with an option to buy (§ 513.53). “Residential” means a property used or meant to be used as a single-family home, including a condominium or townhome unit (§ 513.52).

Before signing the sale agreement, the seller must disclose in writing all material facts the seller knows that could adversely and significantly affect an ordinary buyer’s use and enjoyment of the property, or any intended use the seller knows about. The disclosure must be made in good faith and be based on what the seller knows at that time (§ 513.55).

The seller may give the disclosure to the buyer’s real estate agent, and that counts as giving it to the buyer. The agent must then pass a copy to the buyer.

The sections I read do not prescribe an official form. They set the duty and its content; agents and sellers usually use a standard questionnaire to meet it.

What must the seller also disclose under separate laws?

Other Minnesota statutes add specific topics, each required before the sale agreement is signed:

A seller who hides a private sewage system, and knew or had reason to know of it, owes the buyer the cost of bringing it into compliance, plus reasonable attorney fees, unless both sides agreed otherwise in writing (§ 115.55, subd. 6).

What does the seller not have to disclose?

Section 513.56 lists facts that create no duty to disclose, including:

• that the home was occupied by someone suspected or diagnosed with HIV or AIDS;
• that a suicide, accidental death, natural death or “perceived paranormal activity” occurred there;
• that the neighborhood contains an adult family home, a community-based residential facility or a nursing home;
• information on a registered offender, if the seller gives a timely written notice that the registry can be checked with local law enforcement or the Department of Corrections.

A seller also need not repeat what a qualified third-party report already says, such as a buyer’s inspection, if the report was given to the buyer. The seller must still disclose known facts that contradict the report (§ 513.56, subd. 3).

Which sales are exempt?

Section 513.54 exempts 14 types of transfer. They include gratuitous transfers, transfers by court order, transfers by foreclosure or deed in lieu, transfers to heirs, transfers to a spouse, parent, grandparent, child or grandchild, new homes never lived in, and sales to a tenant in possession. The buyer and seller may also waive the written disclosure by agreeing in writing, but that does not waive duties created by other laws (§ 513.60).

What happens if a seller does not disclose?

A seller who knew a material fact and failed to disclose it is liable to the buyer. The buyer may sue for damages and other equitable relief, and must file within two years after closing (§ 513.57, subd. 2).

Some limits apply. A seller is not liable for an error that was outside the seller’s personal knowledge, or for something that could only be found by inspecting inaccessible areas or by an expert (§ 513.57, subd. 1). If the seller learns before closing that the disclosure was wrong, the seller must tell the buyer in writing as soon as reasonably possible (§ 513.58).

The statute gives the buyer no automatic right to cancel. A missed disclosure does not void the sale on its own, though a court may order rescission (§ 513.59). Claims for fraud or negligent misrepresentation remain available (§ 513.57, subd. 3).

What is the federal lead-paint rule for homes built before 1978?

The EPA’s Lead-Based Paint Disclosure Rule applies to most housing built before 1978. Before the buyer is bound by a contract, the seller must:

• give the buyer the EPA pamphlet “Protect Your Family From Lead in Your Home”;
• disclose known lead-based paint and hazards, and give the buyer any available records and reports;
• include a Lead Warning Statement in or with the contract;
• allow the buyer a 10-day period to test, unless both sides agree in writing to a different length, or the buyer waives it.

The EPA says sellers must keep a signed copy of the disclosures for three years after the sale (40 CFR 745.107). The rule does not apply to foreclosure sales or to housing built after 1977.

For more on inspections, see home inspection cost. To check who is licensed to help, see how to verify a license in Minnesota. A lawyer can advise on a specific dispute.