Disclosure Obligations When Selling a Home in Iowa

Like many states, Iowa requires sellers to reveal various issues with homes that could affect the property’s value or condition. For example, a seller in Iowa can’t fraudulently conceal major defects in a home.  

This article covers disclosure obligations when selling a home, including the following questions: 

• Disclosure Laws for Iowa Home Sales 
• What types of issues or defects are covered under Iowa law? 
• What are the consequences of failure to disclose issues and defects? 

Disclosure Laws for Iowa Home Sales 

Iowa Code 558A requires sellers to deliver written disclosure statements to a person interested in buying a property before they have made a formal offer or the offer has been accepted. The law goes on to require sellers to send disclosure statements to potential buyers either personally or by certified or registered mail. It’s worth noting here that these disclosures cannot be done orally. The law requires written disclosures.  

Should a seller fail to provide the disclosure on time, the buyer can withdraw the offer or revoke the acceptance without liability within three days following the delivery of the statement or five days following delivery by mail. 

Finally, as the seller, there is also an option of filing a disclosure with the county recorder or clerk.  

All information within the disclosure must be made in good faith and, should you come across any additional information needing to be added to the disclosure, you must amend the disclosure statement. If a seller makes misstatements or attempts to use wording to hide defects, they could be exposed to liability when the buyer discovers the condition. 

What types of issues or defects are covered under Iowa law? 

The Iowa Department of Licensing and Regulation has a standard form that sellers must fill out. The seller will certify all the information contained in the form is true and accurate and the buyer must sign it, proving they have received it.  

The disclosure requires you to disclose “all known conditions materially affecting the property.” This includes everything from the roof, basement, sewer, foundation, any termites or infestations, and any environmental hazards such as radon and asbestos.  

The form will also ask sellers to provide additional information to explain the conditions to the buyer, alerting them of the severity of the defects. This can be beneficial both for the seller and the buyer. The seller will be able to show with supporting documents if the issue is minor, or, if the issue is large, what it will take to resolve the issue.  

What are the consequences of failure to disclose issues and defects? 

Sellers have incentive to talk up the good in their homes. However, it is important that sellers consider that they can’t lie or conceal issues in an effort to get their home sold.  

Iowa law requires the disclosure of any “material” issues or defects concerning the home. Material issues or defects are generally understood to mean things that would significantly and adversely affect the property’s value, reduce the property’s structural integrity, or present significant health risks to its occupants. Failing to disclose minor issues, such as a scratch on the floor or wall or missing light bulbs doesn’t rise to this level.  

Even if you can feasibly conceal defects for some time, eventually the buyer will find out about the issues and defects with the home. Even if time has passed, Iowa law provides legal remedies for buyers, stating “A [seller] who violates this chapter shall be liable to a transferee for the amount of actual damages suffered by the transferee . . . “ Should the buyer find out about a condition after the transfer, they can take legal action against a seller based on non-disclosure, recovering the cost of the repair.  

Finally, it’s worth noting that sellers aren’t going to be held liable for conditions found after a good faith effort is made to search for and disclose all issues and defects. Should the seller have made an effort to disclose all defects and something comes up down the road that was unknown to the seller, the buyer will not be able to take legal action against the seller.