CHAPTER 5. RESIDENTIAL REAL ESTATE SALES DISCLOSURE
IC 32-21-5
Chapter 5. Residential Real Estate Sales Disclosure
IC 32-21-5-1
Applicability of chapter
Sec. 1. (a) This chapter applies only to a sale of, an exchange of,
an installment sales contract for, or a lease with option to buy
residential real estate that contains not more than four (4) residential
dwelling units.
(b) This chapter does not apply to the following:
(1) Transfers ordered by a court, including transfers:
(A) in the administration of an estate;
(B) by foreclosure sale;
(C) by a trustee in bankruptcy;
(D) by eminent domain;
(E) from a decree of specific performance;
(F) from a decree of divorce; or
(G) from a property settlement agreement.
(2) Transfers by a mortgagee who has acquired the real estate
at a sale conducted under a foreclosure decree or who has
acquired the real estate by a deed in lieu of foreclosure.
(3) Transfers by a fiduciary in the course of the administration
of the decedent's estate, guardianship, conservatorship, or trust.
(4) Transfers made from at least one (1) co-owner solely to at
least one (1) other co-owner.
(5) Transfers made solely to any combination of a spouse or an
individual in the lineal line of consanguinity of at least one (1)
of the transferors.
(6) Transfers made because of the record owner's failure to pay
any federal, state, or local taxes.
(7) Transfers to or from any governmental entity.
(8) Transfers involving the first sale of a dwelling that has not
been inhabited.
(9) Transfers to a living trust.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-2
"Buyer" defined
Sec. 2. As used in this chapter, "buyer" means a transferee in a
transaction described in section 1 of this chapter.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-3
"Closing" defined
Sec. 3. As used in this chapter, "closing" means a transfer of an
interest described in section 1 of this chapter by a deed, installment
sales contract, or lease.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-4
"Defect" defined
Sec. 4. As used in connection with disclosure forms required by
this chapter, "defect" means a condition that would have a significant
adverse effect on the value of the property, that would significantly
impair the health or safety of future occupants of the property, or that
if not repaired, removed, or replaced would significantly shorten or
adversely affect the expected normal life of the premises.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-5
"Disclosure form" defined
Sec. 5. As used in this chapter, "disclosure form" refers to a
disclosure form prepared under section 8 of this chapter or a
disclosure form that meets the requirements of section 8 of this
chapter.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-5.5
Repealed
(Repealed by P.L.3-2008, SEC.269.)
IC 32-21-5-6
"Owner" defined
Sec. 6. As used in this chapter, "owner" means the owner of
residential real estate that is for sale, exchange, lease with an option
to buy, or sale under an installment contract.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-7
Disclosure form; contents
Sec. 7. The Indiana real estate commission established by
IC 25-34.1-2-1 shall adopt a specific disclosure form that contains
the following:
(1) Disclosure by the owner of the known condition of the
following:
(A) The foundation.
(B) The mechanical systems.
(C) The roof.
(D) The structure.
(E) The water and sewer systems.
(F) Additions that may require improvements to the sewage
disposal system.
(G) Other areas that the Indiana real estate commission
determines are appropriate.
(2) A notice to the prospective buyer that contains substantially
the following language:
"The prospective buyer and the owner may wish to obtain
professional advice or inspections of the property and provide
for appropriate provisions in a contract between them
concerning any advice, inspections, defects, or warranties
obtained on the property.".
(3) A notice to the prospective buyer that contains substantially
the following language:
"The representations in this form are the representations of the
owner and are not the representations of the agent, if any. This
information is for disclosure only and is not intended to be a
part of any contract between the buyer and owner.".
(4) A disclosure by the owner that an airport is located within
a geographical distance from the property as determined by the
Indiana real estate commission. The commission may consider
the differences between an airport serving commercial airlines
and an airport that does not serve commercial airlines in
determining the distance to be disclosed.
As added by P.L.2-2002, SEC.6. Amended by P.L.1-2003, SEC.83.
IC 32-21-5-8
Owner prepared disclosure form
Sec. 8. An owner may prepare or use a disclosure form that
contains the information required in the disclosure form under
section 7 of this chapter and any other information the owner
determines is appropriate.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-9
Disclosure form distinguished from warranty
Sec. 9. A disclosure form is not a warranty by the owner or the
owner's agent, if any, and the disclosure form may not be used as a
substitute for any inspections or warranties that the prospective buyer
or owner may later obtain.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-10
Disclosure form; presentation required before acceptance of offer
Sec. 10. (a) An owner must complete and sign a disclosure form
and submit the form to a prospective buyer before an offer for the
sale of the residential real estate is accepted.
(b) An appraiser retained to appraise the residential real estate for
which the disclosure form has been prepared shall be given a copy of
the form upon request. This subsection applies only to appraisals
made for the buyer or an entity from which the buyer is seeking
financing.
(c) Before closing, an accepted offer is not enforceable against the
buyer until the owner and the prospective buyer have signed the
disclosure form. After closing, the failure of the owner to deliver a
disclosure statement form to the buyer does not by itself invalidate
a real estate transaction.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-11
Owner liability for errors in form
Sec. 11. The owner is not liable for any error, inaccuracy, or
omission of any information required to be delivered to the
prospective buyer under this chapter if:
(1) the error, inaccuracy, or omission was not within the actual
knowledge of the owner or was based on information provided
by a public agency or by another person with a professional
license or special knowledge who provided a written or oral
report or opinion that the owner reasonably believed to be
correct; and
(2) the owner was not negligent in obtaining information from
a third party and transmitting the information.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-12
Matters arising after form delivered; requirement to disclose at
settlement; unknown or unavailable information
Sec. 12. (a) An owner does not violate this chapter if the owner
subsequently discovers that the disclosure form is inaccurate as a
result of any act, circumstance, information received, or agreement
subsequent to the delivery of the disclosure form. However, at or
before settlement, the owner is required to disclose any material
change in the physical condition of the property or certify to the
purchaser at settlement that the condition of the property is
substantially the same as it was when the disclosure form was
provided.
(b) If at the time disclosures are required to be made under
subsection (a) an item of information required to be disclosed is
unknown or not available to the owner, the owner may state that the
information is unknown or may use an approximation of the
information if the approximation is clearly identified, is reasonable,
is based on the actual knowledge of the owner, and is not used to
circumvent the disclosure requirements of this chapter.
As added by P.L.2-2002, SEC.6.
IC 32-21-5-13
Disclosure of defect after offer accepted; buyer's right to nullify
contract; return of deposits
Sec. 13. (a) Notwithstanding section 12 of this chapter, if a
prospective buyer receives a disclosure form or an amended
disclosure form after an offer has been accepted that discloses a
defect, the prospective buyer may after receipt of the disclosure form
and within two (2) business days nullify the contract by delivering a
written rescission to the owner or the owner's agent, if any.
(b) A prospective buyer is not liable for nullifying a contract
under this section and is entitled to a return of any deposits made in
the transaction.
As added by P.L.2-2002, SEC.6.