Are you ready for changes to the Property Disclosure Act?

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Beginning January 1, 2015, there is an important change to Question 6 of the Illinois Residential Real Property Disclosure Act.

Basically, the change is this: The original form required sellers to disclose known defects with walls. But a state Appellate Court decision (Kalkman v. Nedved) narrowly interpreted the Act’s language and determined that “walls” did not include windows and doors.

Hence the change in the Act, which added in disclosure language for windows and doors. IAR has a new form available (and one in Spanish, too). You can find Form 108 here.

Must all sellers complete a new seller disclosure form when the amendment adding windows and doors to Question 6 of the Illinois Residential Real Property Disclosure Act (the Act) takes effect on January 1, 2015?

Not all sellers must complete a new form.  Consider the following:

If the residential property is subject to a pending purchase contract, the seller has provided the form as required by the existing law and the buyer has acknowledged receipt of the property disclosure form before becoming bound on the purchase contract then there should be no need for the seller to complete a new form.  (This answer assumes that the seller has no new actual knowledge regarding defects relating to windows and doors).

If there is no purchase contract pending then it would be prudent brokerage office policy to provide a new disclosure form to its seller clients for completion and ultimate distribution to the buyer before the buyer becomes bound on a purchase contract.

This would be true whether a prospective buyer has previously received a disclosure form or not.  (There might be a legal argument that the seller has met his obligation if he has already provided a form to a prospective buyer and there is not a contract pending, but in the abundance of caution it is best for seller to provide a form that complies with the most recent version of the Act).

If there is a purchase contract pending but seller has not provided the disclosure form to the buyer, he should use the new form.

If exempt from disclosure under existing law that exemption will still apply under the amended law.

If the seller refuses to complete a new form, refer the seller client to their own attorney for specific advice.

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