Flood zone notification - Part 2 - Seller Disclosure

posted by on Tuesday, June 10, 2008

The seller of real property is required by law to complete and serve on all potential buyers, a written seller disclosure.

Chapter 558A of the Iowa Code requires that all real property transactions be accompanied by a written disclosure filled out and completed by the seller of the property. The seller disclosure must be provided to any potential buyers and must be delivered to the potential buyer prior to either the making of a written offer by the seller or acceptance of a written offer by the buyer. Delivery must either be in person or by way of certified or registered mail.

The law also sets forth specific requirements that each seller disclosure form must contain. This includes whether or not the seller knows if the property is located within a flood plain and if so, what the flood plain designation is. The minimum requirements for a seller disclosure are set forth in the Iowa Administrative Code and can be found at http://nxtsearch.legis.state.ia.us/NXT/gateway.dll/IAC?f=templates&fn=default.htm

It is important to note however, that a seller is only required to disclose conditions that are known at the time of the transaction. If they are unknown, there is a portion of the disclosure where that can be indicated. However, the seller is also required to amend the disclosure at all times if additional information is obtained that would put them on notice of the condition. Often times, prior knowledge of the condition can be established through prior permit applications, insurance claims and if it is a builder on new property, their own written documentation.

In the event that the seller does not disclose the conditions of the property including its location within a flood zone, the seller is liable to the buyer for the amount of actual damages suffered by the buyer.

Please see following posts for specifics on each required disclosure.
Seller Disclosures Real Estate Appraiser Disclosures Mortgage Lender & Bank Disclosures