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 buyresidential real estate that contains not more than four (4) residentialdwelling 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 estateat a sale conducted under a foreclosure decree or who hasacquired the real estate by a deed in lieu of foreclosure.
(3) Transfers by a fiduciary in the course of the administrationof the decedent's estate, guardianship, conservatorship, or trust.
(4) Transfers made from at least one (1) co-owner solely to atleast one (1) other co-owner.
(5) Transfers made solely to any combination of a spouse or anindividual 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 payany federal, state, or local taxes.
(7) Transfers to or from any governmental entity.
(8) Transfers involving the first sale of a dwelling that has notbeen 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 atransaction 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 aninterest described in section 1 of this chapter by a deed, installmentsales 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 bythis chapter, "defect" means a condition that would have a significantadverse effect on the value of the property, that would significantlyimpair the health or safety of future occupants of the property, or thatif not repaired, removed, or replaced would significantly shorten oradversely 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 adisclosure form prepared under section 8 of this chapter or adisclosure form that meets the requirements of section 8 of thischapter.
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 ofresidential real estate that is for sale, exchange, lease with an optionto 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 byIC 25-34.1-2-1 shall adopt a specific disclosure form that containsthe following:
(1) Disclosure by the owner of the known condition of thefollowing:
(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 sewagedisposal system.
(G) Other areas that the Indiana real estate commissiondetermines are appropriate.
(2) A notice to the prospective buyer that contains substantiallythe following language:
"The prospective buyer and the owner may wish to obtainprofessional advice or inspections of the property and providefor appropriate provisions in a contract between themconcerning any advice, inspections, defects, or warranties
obtained on the property.".
(3) A notice to the prospective buyer that contains substantiallythe following language:
"The representations in this form are the representations of theowner and are not the representations of the agent, if any. Thisinformation is for disclosure only and is not intended to be apart of any contract between the buyer and owner.".
(4) A disclosure by the owner that an airport is located withina geographical distance from the property as determined by theIndiana real estate commission. The commission may considerthe differences between an airport serving commercial airlinesand an airport that does not serve commercial airlines indetermining 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 thatcontains the information required in the disclosure form undersection 7 of this chapter and any other information the ownerdetermines 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 theowner's agent, if any, and the disclosure form may not be used as asubstitute for any inspections or warranties that the prospective buyeror 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 formand submit the form to a prospective buyer before an offer for thesale of the residential real estate is accepted.
(b) An appraiser retained to appraise the residential real estate forwhich the disclosure form has been prepared shall be given a copy ofthe form upon request. This subsection applies only to appraisalsmade for the buyer or an entity from which the buyer is seekingfinancing.
(c) Before closing, an accepted offer is not enforceable against thebuyer until the owner and the prospective buyer have signed thedisclosure form. After closing, the failure of the owner to deliver adisclosure statement form to the buyer does not by itself invalidatea 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, oromission of any information required to be delivered to theprospective buyer under this chapter if:
(1) the error, inaccuracy, or omission was not within the actualknowledge of the owner or was based on information providedby a public agency or by another person with a professionallicense or special knowledge who provided a written or oralreport or opinion that the owner reasonably believed to becorrect; and
(2) the owner was not negligent in obtaining information froma 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 atsettlement; unknown or unavailable information
Sec. 12. (a) An owner does not violate this chapter if the ownersubsequently discovers that the disclosure form is inaccurate as aresult of any act, circumstance, information received, or agreementsubsequent to the delivery of the disclosure form. However, at orbefore settlement, the owner is required to disclose any materialchange in the physical condition of the property or certify to thepurchaser at settlement that the condition of the property issubstantially the same as it was when the disclosure form wasprovided.
(b) If at the time disclosures are required to be made undersubsection (a) an item of information required to be disclosed isunknown or not available to the owner, the owner may state that theinformation is unknown or may use an approximation of theinformation if the approximation is clearly identified, is reasonable,is based on the actual knowledge of the owner, and is not used tocircumvent 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 nullifycontract; return of deposits
Sec. 13. (a) Notwithstanding section 12 of this chapter, if aprospective buyer receives a disclosure form or an amendeddisclosure form after an offer has been accepted that discloses adefect, the prospective buyer may after receipt of the disclosure formand within two (2) business days nullify the contract by delivering awritten rescission to the owner or the owner's agent, if any.
(b) A prospective buyer is not liable for nullifying a contractunder this section and is entitled to a return of any deposits made inthe transaction.
As added by P.L.2-2002, SEC.6.