Disclosure Requirements in the Sale of Colorado Real Property
What Are the Disclosure Requirements for Residential Sellers in Colorado?
You’re selling your home. Amid the long list of things you need to do to prepare for closing, one task stands out for its legal weight: making proper disclosures. You might wonder how much you’re truly obligated to reveal, whether it’s smarter to be vague, or if completing a form is enough. In Colorado, the law is clear—if you know something about the property that could materially impact a buyer’s decision or the home’s value, you must disclose it. This blog explores Colorado’s real estate disclosure laws for both sellers and brokers, highlighting common pitfalls and legal responsibilities to help you stay compliant and avoid liability.
Why Disclosures Matter in Colorado Real Estate
In Colorado, sellers are legally required to disclose known adverse material facts—conditions or problems that would influence a reasonable buyer’s decision to purchase or the price they’d pay. These may include structural issues, water damage, electrical hazards, foundation problems, zoning violations, or environmental concerns. Disclosure laws aim to ensure buyers are not misled or left in the dark about issues that affect the home’s safety or value.
Certain disclosures are also mandated by statute. Sellers must disclose whether the home is in a special taxing district, is part of a homeowners’ association, or what the source of the property’s potable water is. These rules are part of a broader effort to protect consumers and maintain transparency in residential sales.
Adverse Material Facts vs. Latent Defects
An adverse material fact is any known condition that negatively affects the property’s value, desirability, or use. These can be either visible or hidden. A latent defect, however, refers to a problem that is not immediately apparent or discoverable through a standard inspection—such as mold inside walls, hidden water damage, or unstable soil beneath the foundation. While all latent defects are considered adverse material facts, Colorado’s common law places a special obligation on sellers to disclose them, even if they’re not explicitly requested in a contract or form.
What Sellers Must Disclose
In Colorado, residential sellers have one overarching rule: if you know something is wrong with the property and it could affect a buyer’s decision, you need to disclose it. This includes both obvious and hidden defects. If a seller is aware of issues such as a leaky basement, prior flooding, termite damage, or a faulty roof—even if those issues have been partially repaired—they must be disclosed.
The Colorado Real Estate Commission provides a Seller’s Property Disclosure form, which helps sellers identify and document problems. While the disclosure form is not mandatory, it is widely used and serves as a practical tool for ensuring transparency. Still, completing the form alone does not fully satisfy a seller’s legal duties. If a seller knows something adverse and material that isn’t listed in the form, they are still legally obligated to disclose it.
Colorado courts have consistently upheld this principle. In Gattis v. McNutt, the court reaffirmed that a seller's disclosure obligations extend beyond the form itself. The duty to disclose is tied to what the seller actually knows, not just what’s prompted by the form.
Broker Responsibilities in Colorado Transactions
Brokers in Colorado—whether representing a buyer, a seller, or acting as a neutral transaction broker—are also bound by strict disclosure obligations. State law requires brokers to disclose known adverse material facts to all parties involved in a transaction. This includes sharing facts that come to their attention through inspections, personal observations, or direct communication with their clients.
Brokers are not required to investigate or verify conditions they don’t already know about, nor must they actively search for problems. However, once they are aware of an adverse condition, they must disclose it in writing. A broker who fails to disclose known issues may face disciplinary action from the Colorado Real Estate Commission and could also be exposed to civil liability.
Timing and Updates
Disclosures must be made before closing, and they must be timely and accurate as of the contract deadlines. If new information surfaces after initial disclosures—such as discovering new damage from a storm or learning of a structural problem—sellers and brokers must provide an updated disclosure. Failing to do so could result in serious consequences after closing, including lawsuits for misrepresentation or fraud.
What If a Buyer Discovers an Undisclosed Defect?
Buyers are expected to conduct their own due diligence when purchasing a home. That includes reviewing disclosures, hiring a qualified home inspector, and following up on any red flags that arise during the process. However, if a buyer later discovers a defect the seller knew about and failed to disclose, they may have legal grounds to pursue a claim.
Legal options might include claims for breach of contract, fraud, or negligent misrepresentation. In such situations, buyers should preserve any relevant documentation, including the disclosure forms, the purchase contract, and inspection reports. An experienced real estate attorney can help assess whether the seller violated their legal obligations and what remedies may be available.
Case Law Reinforcing Disclosure Obligations
Colorado courts have reinforced the importance of seller and broker disclosure through a number of decisions. In Cohen v. Vivian, the court held a seller liable for failing to disclose known soil issues that caused structural problems, emphasizing the duty to disclose even latent defects. In Burman v. Richmond Homes, the court clarified that sellers and brokers are not required to disclose facts that are already a matter of public record, such as zoning classifications or recorded special taxing districts, because buyers are presumed to have constructive notice of those.
These cases reflect a consistent judicial view: known problems that are not readily apparent to buyers must be disclosed, regardless of whether they are listed on a form or obvious to the untrained eye.
Limits, Exemptions, and Misunderstandings
Colorado’s disclosure laws are extensive, but they are not absolute. State law does not require sellers to disclose facts that psychologically stigmatize a property, such as past crimes, suicides, or deaths, unless directly asked and specifically authorized. Brokers are prohibited from sharing such information without the seller’s permission.
Certain sellers may also have limited duties. For example, a person who inherits a property but has never occupied it may not have full disclosure obligations, although this exemption does not shield them if they actually know about a defect. One of the most misunderstood issues is the effect of “as-is” clauses in real estate contracts. Many sellers believe that selling a property “as is” eliminates the duty to disclose known problems. It does not. Colorado courts have held that an “as-is” clause does not protect a seller from liability if they fail to disclose a known latent defect.
Why Disclosure Compliance Matters
Making accurate, timely disclosures is not just a best practice—it’s a legal obligation. For sellers, full disclosure helps prevent future claims and protects the integrity of the sale. For brokers, disclosure compliance is a professional responsibility tied to licensure and ethics. And for buyers, it ensures access to the information they need to make an informed investment.
When each party fulfills their disclosure obligations, real estate transactions proceed more smoothly, disputes are avoided, and everyone is better protected from post-closing surprises. But when sellers or brokers withhold information they are legally required to share, the consequences can be significant—both financially and legally. To learn more, read our blog: Colorado Real Estate Disclosures: You Should Tell the Truth, the Whole Truth, and Nothing but the Truth.
How GLO Can Help
At Geraghty Law Office, we help residential buyers, sellers, and real estate professionals understand and comply with Colorado’s complex disclosure laws. If you’re preparing to sell your home, we can review your property and advise on what you are legally required to disclose—even before a contract is signed. We help sellers complete the Seller’s Property Disclosure thoughtfully and thoroughly, ensuring no required disclosures are overlooked. If new facts come to light after disclosures are made, we help prepare timely updates to keep you in compliance and protect your transaction.
GLO helps eliminate that uncertainty. We provide clear, personalized legal guidance to ensure sellers meet their disclosure obligations and buyers are fully informed before closing. Whether you're listing a home or preparing to make an offer, our team works to protect your interests, reduce liability, and create a smooth, transparent transaction from start to finish.
Contact GLO today to find out how we can assist with your real estate disclosure issue.
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