Pursuant to the Illinois Residential Real Property Disclosure Act, 765 ILCS 77/1, the Seller is required to disclose whether it has any knowledge of any defective issues in 23 different construction items (“Items”). This Disclosure must be provided before the closing upon the Property. If the Disclosure is not provided, then the Buyer is not required to purchase the Property. The Seller is not required to perform any investigation of these Items. However, if the Seller has actual knowledge or notice of these Items, then the Seller is required to mark “Yes” on the Illinois standardized Disclosure form. Moreover, if the Seller marks “Yes”, then the Seller must provide further information on the same form of what the Seller’s knowledge or extent of the issue with the Items. If the Seller does not fully disclose its knowledge, then the Buyer can assert a claim against the Seller for violation of this Act within one year of the Property’s closing date.
The Act defines what a material disclosure is as any Items that would substantially adversely affect the value of the Property or would significantly affect the health or safety of the Property. The Buyer has the right to rely upon the Seller’s disclosures regardless of whether the Buyer performs an inspection. If the Seller is found liable for providing false information, then the Seller would be liable for actual damages and possibly attorney fees.
However, the Seller can prevent any liability if any of the following circumstances exist: i) the Seller did not have any knowledge of the defective condition; ii) the Seller based its answer upon the belief that the defect was corrected; or iii) the Seller based its answer on the information provided by a public agency, engineer, pest control operator or a contractor who regularly performs work upon that specific defective condition.
When completing this Disclosure, the Seller should discuss with its attorney what and where work was performed upon the Property and what the information is based upon. An accurate disclosure will confirm that the closing upon the Property is the final time that the Seller deals with the Property.
