Key Takeaways
- Alabama law does NOT require a mandatory seller disclosure statement for residential property
- Alabama follows "caveat emptor" (buyer beware) more than most states
- Licensees must disclose known material defects that affect property value
- Lead-based paint disclosure IS required for pre-1978 homes (federal law)
- Stigmatized property (deaths, hauntings, sex offenders) is generally NOT required to be disclosed unless specifically asked
Alabama Property Disclosures
Alabama's approach to property disclosure differs significantly from most other states.
No Mandatory Seller Disclosure Statute
Alabama has no state law requiring sellers to provide a formal disclosure statement to buyers of residential property.
Key Points
| Fact | Implication |
|---|---|
| No disclosure statute | Sellers not legally required to disclose |
| Caveat emptor | "Buyer beware" principle applies |
| Courts enforce | Caveat emptor clauses in contracts upheld |
Important: This is a significant difference from states like California, Texas, and Florida which require detailed seller disclosures.
Licensee Disclosure Obligations
While sellers may not be required to disclose, licensees have professional obligations:
Material Defects
Licensees must disclose known material defects that:
- Could affect the property's value
- A reasonable person would want to know
- Are not readily apparent
What IS a Material Fact?
| Material Facts | Examples |
|---|---|
| Physical defects | Foundation issues, roof leaks, plumbing problems |
| Environmental hazards | Mold, flooding history, contamination |
| Legal issues | Zoning violations, easements, liens |
| Property condition | Systems not functioning, structural damage |
What is NOT a Material Fact (Generally)
| Not Material | Reason |
|---|---|
| Deaths on property | Not required unless specifically asked |
| Alleged hauntings | "Psychologically impacted" property |
| Nearby sex offenders | No duty to investigate or disclose |
| Stigmatized property | Protected under Alabama law |
Stigmatized ("Psychologically Impacted") Property
Alabama law provides protection for licensees regarding stigmatized property:
No Duty to Disclose
Licensees have no duty to inquire about or disclose:
- Deaths on the property
- Suicides or violent crimes
- Alleged paranormal activity
- Proximity to sex offenders
Exception: Direct Questions
If a buyer directly asks about a specific issue and the licensee knows the answer, they must respond honestly.
Example: If a buyer asks "Did someone die in this house?" and the agent knows the answer, they should respond truthfully.
Methamphetamine Production Disclosure
If a licensee knows methamphetamine was produced in a property:
| Factor | Consideration |
|---|---|
| Material to value | Cleanup costs can be significant |
| Should disclose | Yes—affects property value |
| Walk away option | Agent may decline listing if seller won't disclose |
Voluntary Disclosure: Seller Property Disclosure Form
The Alabama Realtors Association provides a voluntary Seller Property Disclosure form:
| Feature | Details |
|---|---|
| Who uses it | About 70% of Alabama licensees (Realtors) |
| Required by law | No—voluntary |
| Contents | ~60 questions about property condition |
| Responses | Yes, No, Unknown, Not Applicable |
Best Practice: Many brokerages require sellers to complete this form even though it's not legally mandated.
Federal Lead-Based Paint Disclosure
For homes built before 1978, federal law requires:
| Requirement | Details |
|---|---|
| Disclosure | Known lead-based paint hazards |
| Pamphlet | EPA pamphlet "Protect Your Family From Lead" |
| Inspection period | Buyer has 10 days to inspect (waivable) |
| Form | Lead-Based Paint Disclosure form |
Warning: Lead-based paint disclosure is REQUIRED regardless of Alabama's no-disclosure stance on other issues. This is federal law.
Which statement is TRUE about Alabama's property disclosure requirements?
Under Alabama law, which of the following MUST be disclosed?
If a buyer asks an Alabama licensee directly whether anyone died in a house, what should the licensee do?