A Guide to Iowa's Property Seller Disclosure Act and How to Avoid Costly Mistakes
When Dorothy decided to sell her family’s century-old Grinnell farmhouse, she never imagined the most challenging part would be remembering decades of repairs and potential issues. At 78, Dorothy was ready to downsize and move closer to her grandchildren in Des Moines, but the legal paperwork felt overwhelming.
She soon learned that Iowa’s Property Seller Disclosure Act required her to provide a detailed written statement about her home’s condition before any offer could be accepted. For Dorothy and thousands of other Iowa property sellers, understanding these disclosure requirements isn’t just about following the law—it’s about protecting their financial future.
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Why This Matters
Dorothy’s farmhouse, built in 1940, had seen generations of family life and repairs. She worried about what she might have forgotten: Was there water damage in the basement she’d missed? Had the septic system ever been professionally inspected? The barn roof hadn’t been checked in years, and she had no idea if the well water met current standards.
Like Dorothy, many Iowa sellers wonder how much they are supposed to know and share. The stakes are high, as incomplete or inaccurate disclosures can lead to legal liability for damages if the buyer later discovers a problem the seller should have disclosed. For elderly sellers, landlords, or even first-time homebuyers, a single missed detail can put years of savings or a new investment at risk.
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Understanding Iowa Law
Iowa law provides clear guidance on a seller's obligations. Under Iowa Code Chapter 558A, anyone selling residential property with one to four dwelling units must deliver a written disclosure statement to the buyer before any written offer is made or accepted. This disclosure must detail the condition and important characteristics of the property, including any significant structural defects, water issues, roof problems, and details about the well and septic system. Because Dorothy's farmhouse was built before 1978, she was also required to provide a separate federal lead-based paint disclosure and an informational pamphlet about its hazards.
The law is specific about how and when to deliver this statement. According to Iowa Code §558A.2, either the seller or their agent must provide the document to the buyer before an offer is accepted. The required contents are outlined in Iowa Code § 558A.4, which mandates that sellers answer all questions honestly and disclose all known material conditions. If a seller doesn't know the answer to a question, they must make a reasonable effort to find the information before marking it as unknown. If new information comes to light or a seller realizes something was inaccurate before closing, they are required to amend the disclosure.
Most importantly, Iowa Code § 558A.6 makes sellers liable for errors or omissions if they failed to use ordinary care in gathering information or if they had actual knowledge of a defect and did not disclose it. The law does not require proof of fraud; a buyer can claim damages based on negligence or a lack of reasonable effort. These requirements are designed to protect both parties by promoting transparency and accountability in every transaction.
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Real-World Scenarios
Dorothy’s careful approach was tested when a young investor asked detailed questions about the barn and septic system. Unable to remember the last inspection, she called a neighbor, checked old receipts, and hired a contractor to assess the barn roof. For the well and septic systems, she attached recent inspection reports, making it clear where her knowledge ended and professional advice began. She also provided the federally required lead-based paint pamphlet, fulfilling all her obligations. Consider what could have happened differently.
Imagine Jamal, a first-time homebuyer in Iowa City, who relies on the seller's disclosure and skips a home inspection to save money. After moving in, he discovers mold hidden behind the walls. Under Iowa law, Jamal could seek actual damages if he can prove the seller failed to exercise ordinary care or had actual knowledge of the defect.
Or take Priya, a small business owner buying a mixed-use building in Cedar Rapids. The out-of-state seller rushes through the form and forgets to mention a history of roof leaks. When heavy rain causes water damage to her bakery, Priya could claim compensation for her losses because the seller did not make a reasonable effort to provide an accurate disclosure.
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Iowa-Specific Considerations
Iowa’s mix of rural and urban properties means disclosures can look very different from one sale to the next. For sellers of rural properties like Dorothy’s, disclosures often involve wells, septic systems, and outbuildings, each with unique maintenance records and potential risks. State law requires sellers to disclose any known issues with these features.
In urban areas, the focus may shift to foundation issues, older plumbing, or pest infestations. Iowa’s agricultural heritage also means many properties are older, increasing the likelihood of lead-based paint concerns and long-standing structural issues. No matter the location, the law expects thorough and honest disclosure.
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What You Should Do
To protect yourself as a seller, it is wise to follow the same careful steps Dorothy took. Start the process early by gathering all maintenance and repair records for your property. If you are unsure about the condition of specific features like the roof or HVAC system, inspect them yourself or hire a professional for an assessment.
Fill out the disclosure form completely and honestly, marking a condition as “unknown” only after you have made a reasonable effort to find the information. If new information comes to light before closing, be sure to amend the disclosure statement promptly.
Finally, ensure the completed disclosure is delivered to the buyer before any offer is accepted, as required by Iowa Code § 558A.2. Consulting with a real estate attorney can provide additional peace of mind throughout the process.
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The Bottom Line
Dorothy’s story ends with a successful sale, her financial future secure, and her reputation intact. By taking Iowa’s disclosure requirements seriously, she protected both herself and her buyer from future disputes. Whether you are a retiree like Dorothy, a first-time homebuyer like Jamal, or a business owner like Priya, honest and thorough disclosure benefits everyone involved in a real estate transaction.
Diligence today is the best way to prevent costly legal problems tomorrow.
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Disclaimer: The names and specific details in the stories and scenarios presented in this blog post are fictitious and have been created for illustrative purposes. However, these stories are based on real-life situations and legal issues that commonly occur in Iowa real estate transactions.
Any resemblance to actual persons, living or deceased, or actual events is purely coincidental. This content is for informational purposes only and does not constitute legal advice.
