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9 min read Feb 19, 2023

Seller Disclosure Requirements in Arizona

Important: The blog article below is informational and should not be deemed as legal advice. Houzeo and its bloggers are not attorneys. For any questions and legal advice, consult a licensed attorney.

Real estate disclosures in Arizona are one of the most complex disclosure processes in the USA. Most sellers are left scratching their heads while filling out the numerous forms of seller disclosures in Arizona. They’re not only unending, but also quite complicated to understand for someone with no understanding of the field. But worry not, we are here to make that process easier when you want to sell a house in Arizona.

The disclosure statement contains known property defects that a home seller must complete. It’s the seller’s obligation to disclose conditions of the property and known issues that affect the property’s quality. Although it could be a stressful process, when done properly, it helps avoid future problems—like major defects or serious legal trouble. Like most of the states, the Arizona Association of Realtors uses a disclosure statement to disclose facts of the seller’s best actual knowledge.

Here are the three disclosure requirements you need to know if you are selling a property in Arizona: 

  1. Federal Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards
  2. Comprehensive Loss Underwriting Exchange Report (CLUE)
  3. Seller’s Property Disclosure Form

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Residential Lead-Based Paint Hazard Reduction Act

The Residential Lead-Based Paint Hazard Reduction Act passed in 1992 requires the disclosure of any lead-based paint or chipped paint in any housing built before 1978

Under Federal law, Arizona properties built before the year 1978 are obligated to comply with the disclosure of information on lead-based paint hazards. As stated in the form, “Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning may also risk to pregnant women.” That’s why a risk assessment for lead-based paint is crucial and highly required before the purchase.

The home seller is given a 10-day period to perform a paint inspection or risk assessment for lead-based paint or any related hazards. To get a lead hazard inspection certified (EPA administers) firm, you can visit this site here.

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Comprehensive Loss Underwriting Exchange Report (CLUE)

CLUE Report is basically a five-year insurance claims history that sellers are required to request to their insurance provider. According to the Residential Resale Real Estate Purchase Contract in Arizona,

the seller shall deliver to the buyer a written five year insurance claims history regarding the Premises (or claims history for the length of time the Seller has owned the Premises if less than five years), from the seller’s insurance company or an insurance support organization or consumer reporting, or if unavailable from these sources from the seller, within five days after contract acceptance.

This is a required report that contains the date and type of loss, and also insurance claims for incidents (water damage, fire loss, etc.). Other information like if the claim was denied, or the amount you paid out—also the homeowner’s insurance claim and policy number. The CLUE report is a useful tool to understand or know the quality of the property before setting the price. In other words, it’s not a kind of disclosure form or home inspection, but an additional document that evaluates the cost of sellers/homeowner’s insurance.

Seller’s Property Disclosure Statement

The Arizona Association of Realtors uses a Residential Seller’s Property Disclosure Statement (SPDS) to help sellers comply with the transaction requirements. The standard form is basically a checklist of the property’s condition and all its features that could affect the buyer’s decision in purchasing the house. Whether the marketed property is sold “as is”, it still required to complete a disclosure statement. The seller should submit or deliver the form within five days prior to the buyer’s acceptance of the sale offer. However, its’ also better if sellers could give the form during open houses or showings.       

The standard form is a legally binding agreement and must not be considered as a warranty. In this form, the seller should disclose a variety of facts about the property based on the seller’s actual knowledge and information—and to answer fairly and in good faith.

Here is the following information that a seller should disclose as required by the state and to Arizona’s seller disclosure requirements.

Property and Ownership

  • Property Address
  • Legal Owners of the Property
  • Building and Safety Information
    • Roof/Structural – Roof leaks, repairs, or roof warranty
    • Structural Foundation Cracks
    • Chimney or Fireplace Problems
    • Wood Infestation – wood destroying organisms
    • Heating and Cooling Systems
    • Plumbing – waterpipes, water pressure problems, and landscape watering system
    • Swimming Pool/Spa/Hot Tub/Sauna/Water Feature
    • Electrical and other related Systems
    • Miscellaneous – includes animals/pets in the property, and other improvements or alterations
  • Utilities (Services)
    • Electricity, Fuel, Cable, Internet, Telephone, Garbage Collection, Fire, Irrigation, Water Source, US Postal Code Delivery, Alternate Power Systems.
  • Environmental Information
    • Soil Settlement, Drainage, Erosion, Fissures, Dampness
  • Sewer/Wastewater Treatment
  • Other Conditions and Factors
    • Explain other important material information that you are aware of the condition of the property.

Additional Statutory Disclosure Requirements

There are two choices you can answer to each of the questions raise in the form. The options are “Yes”, “No”—and some may need an explanation of the property’s defect. If you have any questions about what’s listed on the form, you can consult your realtor or your real estate attorney for advice.

The Arizona law states that sellers don’t have to disclose the following facts about the property, (1) If the house was the location of natural death, suicide, homicide, or any other felony crime. (2) If the property’s occupants were diagnosed as having AIDS or any other diseases; and (3) if it’s a home located in the vicinity of a sex offender. For instance, however, if the buyer asks for any of this information, the seller should honestly answer the inquiry or in such cases can just state that you’re not legally required to answer that matter.

If the buyer wishes to verify the condition of the property, he/she may do so. Home inspections such as wood-destroying insect inspections, water availability, and other major systems that are mentioned in the form. Under the Residential Real Estate Purchase Contract, the buyer can do a 10-day inspection period to investigate and re-examine the house.

Note: Read and review the disclosure form carefully before marking yes or no. Answer each aspect of the property defect to the best of your knowledge. If in doubt, you can contact your real estate agent or lawyer for a bit of advice or opinion.

Once the property’s inspection is completed, the buyer can also deliver a Buyer’s Inspection Notice and Seller’s Response (BINSR) providing a list of issues or things that aren’t aligned with what the form states. If the seller doesn’t approve the items listed, the buyer has the right to void the contract or accept the property’s current condition.

seller disclosure in arizona

What if the seller fails to disclose any of this information to the buyer?

If you violate or fail to disclose known defects (to the best of your knowledge) by misleading or misrepresenting any material information, the buyer could sue the seller against fraud—and could void the sale. The seller then should pay for substantial monetary damages and also the court costs if the said claim is proven.  

While it may be tempting and easy to trick the new buyer for a higher sale, the consequences are far greater than you imagine. So, as much as possible, just make sure to disclose any known information about your property. Rather than getting more sales, you could end up spending a lot of fortune.

When selling a property fast, complete the disclosure requirements and keep it honest and professional, abiding the law of the state. If you’re confused, contact licensed Arizona real estate agents for professional opinion and advice.

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