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James Sheets

In selling a home property in Iowa, the law requires that the seller make certain disclosures about the property to provide an interested party with the necessary information that a buyer would need to know to make an informed purchase of the property.  

These disclosures must be made in writing, and there are, in fact, standard forms that are commonly used in making these disclosures.  

The Iowa Code places a duty on a licensed realtor to disclose to each party "all material adverse facts that the licensee knows." According to the law, a material fact is a fact that a "party indicates is of such significance, or that is generally recognized by a competent licensee as being of such significance to a reasonable party, that it affects or would affect the party's decision to enter into a contract . . . or would affect the party's decision about the terms of the contract."  

A material fact is considered adverse when it involves a condition or occurrence that a competent licensee generally recognizes as resulting in any of the following:  

  1. Significantly and adversely affecting the value of the property  
  1. Significantly reducing the structural integrity of improvement to real estate  
  1. Presenting a significant health risk to occupants of the property  

What is a Residential Property Seller Disclosure?

The law requires that a specific disclosure form, a Residential Property Seller Disclosure Statement," be used, which provides more specific information about what is a material fact. The forms note that there is a good faith requirement in the disclosures which means that the seller cannot willingly turn a blind eye to the property's conditions and must be forthcoming in providing specific details in writing.  

Iowa disclosure paperwork with gavel


A Seller's Disclosure in Iowa includes:  

1. Basement/Foundation: Any known water or other problems? Any known repairs?  

2. Roof: Any known problems? Any known repairs?  

3. Well and Pump: Any known problems? Any known repairs?  

4. Any water tests? If yes, the date of the last report and results:  

5. Septic Tanks/Drain Fields: Any known problems?  

6. Sewer Systems: Any known problems? Any known repairs?  

6. Heating System(s): Any known problems? Any known repairs?  

7. Central Cooling System(s): Any known problems? Any known repairs?  

8. Plumbing System(s): Any known problems? Any known repairs?  

9. Electrical System(s): Any known problems? Any known repairs?  

10. Pest Infestation (e.g., termites, carpenter ants): Any known problems? Any known structural  


11. Asbestos: Is any known to be present in the structure?  

12. Radon: Any known tests for the presence of radon gas?  

13. Lead-Based Paint: Is any known to be present in the structure?  

14. Flood Plain: Do you know if the property is located in a flood plain?  

15. Zoning: Do you know the zoning classification of the property?  

17. Shared or Co-Owned Features: Any features of the property known to be shared in common with adjoining landowners, such as walls, fences, roads, and driveways whose use or maintenance responsibility may have an effect on the property?  

18. Physical Problems: Any known settling, flooding, drainage, or grading problems?  

The seller must then explain any "YES" response and use it on the back of this statement or additional sheets if necessary.  

There nevertheless has been criticism of the term material as being unclear. The definition is simple enough, but the trouble is what may be "material" to one potential buyer may not be material to the next. Furthermore, the materiality is based on the subjective buyer's point of view rather than a more reasonable, objective point of view. Thus, it's possible that something insignificant to a seller could be a "deal breaker" for a buyer based on the buyer's subjective interests and concerns.  

Iowa real Estate property

Finally, some sellers have complained that the definition lacks specific information about what conditions may affect value, structural integrity, or health—leaving disclosure decisions mainly at the discretion and (hopefully) good judgment of the seller or agent.  

Remember that, as with many legal principles, there are exceptions. A seller does not need to disclose the following material adverse facts:  

  1. Those that are known by the buyer  
  1. Those a buyer could discover through a reasonably diligent inspection  
  1. Those facts whose disclosure is prohibited by law  
  1. Those that are known to a person who inspects on behalf of the party  

What Disclosures are Required?

In addition to the seller, any real estate working for the seller or buyer must also provide disclosures. There are two essential required real estate disclosures that the relator must make in the course of assisting a buyer in the course of the purchases: the agency disclosure which must begin with an agency disclosure—a form, signed by both parties, that explains the type of agency relationship that is established as well as informs the parties of who the real estate represents. There are several types of agency relationships in the real estate business, but the most common ones are: a seller's agent, buyer's agent, and disclosed dual agent.  For more information on disclosure obligations read our article, Disclosure Obligations When Selling a Home in Iowa.  

There are, however, several property transfers that are exempt from seller property condition disclosures altogether. These include:  

  1. Court-ordered transfers such as bankruptcy, eminent domain, or foreclosure,  
  1. Reclaimed mortgages  
  1. Estate administration  
  1. Joint tenant or tenant in common transfers  
  1. Spousal or lineal kinship transfers  

The general idea behind these required disclosures is that any buyer needs to know this basic information to buy a residential property. As the seller is in the best position to know the property's condition, the seller must act in good faith and tell the buyer what is needed before buying. What happens if a seller misrepresents or lies about these disclosures" This can be a series problem and constitute a form of fraud and is thus actionable under law. If you are dealing with either side of buying/ selling a home in Iowa and are wondering what your legal options are, feel free to call O’Flaherty Law to talk to an Iowa real estate attorney. We would be happy to help you.  

Disclaimer: The information provided on this blog is intended for general informational purposes only and should not be construed as legal advice on any subject matter. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship. Each individual's legal needs are unique, and these materials may not be applicable to your legal situation. Always seek the advice of a competent attorney with any questions you may have regarding a legal issue. Do not disregard professional legal advice or delay in seeking it because of something you have read on this blog.

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