Most sellers of one- to four-unit homes must deliver Indiana’s “Seller’s Residential Real Estate Sales Disclosure,” State Form 46234. This form describes the seller’s known property conditions before accepting an offer.
Under Indiana Code, Section 32-21-5-1, any sale, exchange, installment sales contract or lease with an option to buy residential real estate of up to four dwelling units triggers a seller’s duty to complete and deliver the Real Estate Commission’s standardized disclosure form. That form requires the seller to reveal all known information about the property’s major systems and conditions. This includes the foundation, roof, structural elements, mechanical systems (heating, cooling, plumbing, and electrical), water/sewer infrastructure, contamination from controlled substances, etc.
For each category, the seller must indicate whether any defects exist, describe repairs or replacements undertaken and note unresolved issues that could materially affect the home’s safety, habitability or value. By mandating a uniform format and specific line-item disclosures, the statute promotes transparency, helps prospective buyers make informed decisions and reduces the likelihood of disputes after closing.
Consequences of nondisclosure
If a seller fails to provide the completed form or knowingly withholds adverse information, the buyer may rescind the transaction or pursue damages under Indiana’s Residential Real Estate Disclosure Act. To begin with, the purchaser can cancel the deal by delivering written notification to the seller, typically within sixty days after executing the purchase contract or upon learning of the omitted information. Rescission restores both parties to their pre-contract positions: the buyer’s earnest money, inspection fees and other payments are refunded and the seller retains the property free of the buyer’s claim.
Second, regardless of whether the buyer elects rescission, they may pursue a civil action to recover damages. These can include the cost of repairing or remediating undisclosed defects, compensation for diminished property value, and any out-of-pocket expenses the buyer incurred in reliance on the form. If a court finds that the seller intentionally concealed or misrepresented material facts, it may also award attorney’s fees, court costs and, in particularly egregious cases, punitive damages. Together, these sanctions both make harmed buyers whole and deter sellers from undermining the statutory disclosure regime.
Practical steps
If you are a seller, do not forget to download and complete State Form 46234. Attach addenda, if needed for detail. Do not forget to disclose known defects. If unsure, mark “unknown,” but do not guess or opine about possibilities that you do not know. And, keep records (repairs, permits, service invoices, etc.) to support answers.
For buyers, State Form 46234 is not insurance. This is why they are generally, encouraged to get inspections because the form also does not replace due diligence.
