Seller disclosure in Wisconsin: the condition report rules

Who must give the report

The duty falls on “all persons who transfer real property” in Wisconsin by sale, exchange or land contract, including condominium units and time-share property (§ 709.01). The law covers two kinds of property: land with one to four dwelling units that has been inhabited, and land with no buildings (§ 709.001). Homes use the Real Estate Condition Report (§ 709.03). Vacant land uses a separate Vacant Land Disclosure Report (§ 709.033).

Who is exempt. Chapter 709 does not apply when:

• The seller is a personal representative, trustee, conservator or court-supervised fiduciary who has never occupied the property (§ 709.01(2)).
• The home has never been inhabited (§ 709.001(5)).
• The transfer is exempt from Wisconsin’s real estate transfer fee under § 77.25, which lists, among others, transfers between spouses, transfers between parent and child for nominal or no consideration, and transfers by will or survivorship.

What the report covers

The statute prints the form, and it must be used “in substantially the following form” (§ 709.03). The owner answers “yes,” “no” or “not applicable” to each question and must explain every “yes.” Its sections cover:

• structural and mechanical systems
• environmental conditions
• wells, septic systems and storage tanks
• taxes, special assessments and permits
• land use
• additional information

The owner answers “to the best of the owner’s knowledge.” The form defines a “defect” as a condition that would have a significant adverse effect on the property’s value, significantly impair the health or safety of future occupants, or significantly shorten the expected life of the premises if not repaired or replaced. A report is “complete” only if the owner answered every item (§ 709.02). For a condominium unit, the owner adds an addendum with the association’s name, current assessments and an executive summary (§ 709.02(2)).

An owner may rely on written information from a licensed engineer, a professional land surveyor, a pest control operator, a qualified third party, a contractor (on matters in the contractor’s trade) or a public agency. The owner is not liable for an error based on that information if the owner did not know of it (§ 709.07).

Deadlines and the buyer’s right to rescind

Rescission is “the only remedy under this chapter” (§ 709.05(4)). Every disclosure must also be made “with honesty in fact” (§ 709.06). The seller must note compliance in the contract, the closing statement or an addendum (§ 709.04). A buyer may waive the right to rescind, or the right to receive the report, in writing, and the right to rescind ends if the buyer proceeds to closing (§ 709.08).

The deadlines are short, so build them into your contract dates. See home buying steps and home inspection cost for how an inspection fits in. The form itself warns that “technical knowledge such as that acquired by professional inspectors may be required to detect certain defects.”

What licensees may and may not say

A real estate licensee may not disclose information whose disclosure would be unlawful housing discrimination, and does not have to disclose that a property was the site of an event that did not affect its physical condition (§ 452.23). If a written report from a qualified third party exists, the licensee need not repeat its contents, but must disclose any facts the licensee knows that contradict it. The form also tells parties that licensees may not advise whether an item is a defect or explain their legal rights. For legal questions, see real estate attorneys in Wisconsin.

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

This rule applies on top of Wisconsin law. Before the buyer is bound, the seller of pre-1978 housing must give the buyer the EPA lead pamphlet, disclose known lead-based paint information and records, and include a Lead Warning Statement. The buyer gets 10 days to arrange an inspection or risk assessment, unless the parties agree otherwise in writing or the buyer waives it. The seller keeps a signed copy for three years. The rule does not cover housing built after 1977 or foreclosure sales (EPA).