What You Need to Know About Disclosure Rules in Chicago

What You Need to Know About Disclosure Rules in Chicago (Source: Pixabay.com - used as royalty free image)

How much do you deserve to know about the Chicago home that you’re moving into? What do you need to be honest and upfront about when you’re selling a property? Fortunately, as a buyer or a seller, you don’t need to wonder – when it comes to disclosure, the law is fairly straightforward, and honesty is the policy on the books.

In Illinois, the Illinois Residential Real Property Disclosure Act, passed back in the 1990s, is the law of the land when selling a residential property, save for a few exceptions. In essence, sellers are required to tell prospective buyers, in writing, about any material defects, unsafe conditions, and code violations before signing the sales contract. We'll let Chicago real estate attorney Michael Gunderson, of The Gunderson Law Firm, explain further:

Real estate agents working on behalf of a seller, listing property, must disclose latent defects (i.e. defects that are known to the broker but might not be visible or apparent) to a purchaser. While the agent is not responsible to discover, investigate or otherwise uncover these defects, they have a duty under Illinois law to make defects disclosures that they have knowledge of. Furthermore, sellers of real property are required to complete property disclosures that cover a host of possible issues, from flood damage to the presence of termites."

-- Michael Gunderson, Gunderson Law Firm

For reference, check out this standard copy of a property disclosure report.

When buying a home in Illinois, there are also other disclosures required in many cases, including a disclosure of information on radon hazards and a disclosure of information on lead-based paint, a requirement for all homes built before 1978. And bear in mind that, while these reports are exhaustive, they can’t necessarily cover every unique circumstance; regardless of the forms, the moral thing is for a seller and their broker to disclose any and all material defects with the property.

More recently, changes to the mortgage process on the national level – enacted last year – have led to more disclosures for buyers and sellers during the closing process.

Known as “TRID rules” (an acronym for “TILA-RESPA Integrated Disclosure”), these new policies require the issuing of multiple forms meant to be signed by both buyer and seller at closing, describing fees, closing costs, insurance, escrows, credits, and more. The "Closing Disclosure" form – a model of which is available here - must be issued to the buyer at least 3 days before closing; if this timeline is not met, it could lead to a 7- to 10-day delay in closing.

Have any more questions about disclosures in Chicagoland? Looking for a real estate team to help guide you through the ins and outs of buying or selling a home? That’s where Real Group comes in! We’ve seen it all over the years, and we’d love to share our experience with you. Drop us a line today to get the conversation started!

Our thanks to Michael Gunderson for his input! A second-generation attorney, Mike feels great empathy for his clients and works hard to provide them with the legal services they need and the dedicated representation they deserve in carrying out whatever legal issue he can take on for them. Away from the job, Mike’s empathy drives him in other ways, including support for animal rescue organizations, youth football teams, fund-raising and advocacy for disadvantaged children, and providing pro bono legal consulting to community groups and low income families.

Real Group Real Estate

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