What Is Maryland’s Property Disclosure and Disclaimer Statement?

Maryland’s property disclosure statement is a written form a seller of residential property with four or fewer units must give the buyer before the contract of sale is signed, under Real Property Code § 10-702. Sellers can choose between two forms: a disclosure statement that answers specific questions about the property’s condition based on actual knowledge, or a disclaimer statement that sells the home as-is. Either way, the seller still has to reveal any known latent defects.¹

Disclosure or Disclaimer: The Seller’s Choice

The disclosure statement requires the seller to answer specific questions about the property’s condition based on what they actually know. The disclaimer lets the seller sell as-is without making representations about the condition, with one carve-out: known latent defects still have to be disclosed.

A latent defect, under the statute, is a material defect that a buyer wouldn’t reasonably catch during a careful visual inspection and that poses a direct threat to the health or safety of the buyer or any occupant. Hidden foundation damage that affects structural integrity, or a failing septic system with no visible signs at the surface, are the kinds of problems that qualify. Picking the disclaimer does not mean the seller gets to stay silent about those. It only excuses the seller from disclosing conditions that fall short of being latent defects.

What the Disclosure Form Asks About

The disclosure form, published by the Maryland Department of Legislative Services, covers roughly 20 categories of the property’s condition. For each item, the seller marks “yes,” “no,” or “unknown” and can add comments.²

Structural systems: foundation settlement, basement moisture or leaks, roof condition and age, exterior walls, and floors
Mechanical systems: plumbing, heating, air conditioning, electrical (fuses, circuit breakers, and wiring), and hot water
Water and sewage: water supply source, septic system function and last pumping date, and whether a home water treatment or fire sprinkler system is present
Exterior drainage: whether water stands on the property for more than 24 hours after a heavy rain, and gutter and downspout condition
Wood-destroying insects: infestation, prior damage, treatments, repairs, or warranties
Hazardous materials: known presence of asbestos, radon gas, lead-based paint, underground storage tanks, licensed landfills, or other contamination
Smoke and carbon monoxide alarms: whether smoke alarms work during power outages, their age, and whether carbon monoxide alarms are installed in homes with fossil-fuel combustion
Zoning and permits: zoning violations, nonconforming uses, building restriction violations, setback issues, recorded or unrecorded easements, and whether permits were pulled for improvements
Flood zone and environmental designations: whether the property sits in a flood zone, conservation area, wetland area, Chesapeake Bay critical area, or designated historic district

The standard throughout is actual knowledge. Sellers aren’t expected to hire inspectors or investigate conditions they don’t know about, and “unknown” is a legitimate answer.

Sales That Don’t Require the Form

Several categories of transactions are exempt from § 10-702:

The initial sale of a home that has never been occupied, or one where a certificate of occupancy was issued within one year before the contract date
Sales by lenders who acquired the property through foreclosure or deed in lieu of foreclosure, plus sheriff’s sales, tax sales, and sales by court-appointed trustees
Transfers by fiduciaries administering an estate, guardianship, conservatorship, or trust
Transfers that qualify for exemption from the transfer tax under Maryland Tax-Property Article § 13-207, though the statute excludes land installment contracts and options to purchase from this exemption
Sales where the buyer intends to convert the property to a non-residential use or demolish it
Sales of vacant lots without structures

Family transfers are not a standalone exemption. A sale between relatives is only exempt if it also qualifies under § 13-207, so sellers should confirm their specific transaction fits rather than assuming any transfer within a family is covered.¹

Timing and the Buyer’s Right to Rescind

The seller has to deliver the disclosure or disclaimer statement on or before the contract of sale is signed. Miss that window, and the buyer gets an unconditional right to walk away. The buyer can rescind the contract at any time before receiving the statement, or within five days after receiving it, by giving written notice to the seller or the seller’s agent. The seller must immediately return all deposits.¹

The rescission right can also end early. If the buyer submits a written mortgage application and the lender discloses in writing that doing so ends the rescission right, the right expires at that point. If a lender who already has the buyer’s application sends written notice that the rescission right ends in five days, that five-day clock controls instead. Buyers who want to preserve the right should ask for the disclosure or disclaimer before applying for financing.

What a Seller Can Be Held Liable For

Completing the disclosure statement does not make a seller a guarantor of the property. The statute protects sellers from liability for errors, inaccuracies, or omissions when the information was not within the seller’s actual knowledge, was provided by a government agency, or came from a report by a licensed professional such as an engineer, surveyor, geologist, pest control expert, or home inspector.¹

That protection disappears when the seller knows about a problem and conceals it. A seller who hides a defect or lies on the form can face rescission of the sale, a suit for the cost of repairs, or damages for the diminished value of the property. Where fraud is intentional, Maryland courts may add punitive damages on top of compensatory damages. Honest mistakes within the actual-knowledge standard are forgivable; deliberate concealment is not.

Choosing the disclaimer does not change this. A seller who picks the disclaimer specifically to avoid revealing a known latent defect is exposed to the same fraud-based liability as a seller who lies on a full disclosure form.

Lead-Based Paint Disclosure for Pre-1978 Homes

Federal law adds a separate obligation for homes built before 1978. Before the buyer is obligated under the contract, the seller must disclose any known lead-based paint or lead-based paint hazards, provide all available records and reports, and deliver the EPA pamphlet Protect Your Family From Lead in Your Home.³

The seller must give the buyer at least 10 days to hire a certified inspector or risk assessor to test for lead-based paint, though the buyer can waive that right in writing. The sales contract has to include specific warning language about lead-based paint hazards. Violations can draw civil penalties of up to $10,000 per violation under the Toxic Substances Control Act.⁴

This runs alongside the Maryland form, which already asks about lead-based paint under the hazardous materials question. Sellers of pre-1978 homes complete both.

What the Real Estate Agent Owes

Real estate agents carry a separate disclosure duty under Maryland Business Occupations and Professions Code § 17-322. The Maryland Real Estate Commission can reprimand, suspend, or revoke the license of any agent who intentionally or negligently fails to disclose a material fact that the agent knows or should know and that relates to the property involved in the transaction.⁵

The standard for agents is higher than the one for sellers. Sellers are judged on what they actually know. Agents are judged on what they know or should know. An agent who sees obvious signs of water damage during a listing appointment cannot credibly claim ignorance the way a seller who never noticed the staining might.

1
Maryland General Assembly. Maryland Code Real Property 10-702 – Single Family Residential Real Property Disclosure Requirements
2
Maryland Department of Legislative Services. Maryland Residential Property Disclosure and Disclaimer Statement
3
US EPA. Protect Your Family from Lead in Your Home (English)
4
eCFR. 24 CFR Part 35 Subpart A – Disclosure of Known Lead-Based Paint
5
Maryland General Assembly. Maryland Code Business Occupations and Professions 17-322 – Denials, Reprimands, Suspensions, Revocations, and Penalties — Grounds