Indiana's Seller Disclosure Law: What Home Sellers Are Legally Required to Tell Buyers

Indiana requires most residential sellers to fill out a formal disclosure form before a sale closes — but the law has real limits, and misunderstanding those limits is one of the most common sources of post-closing disputes we see between buyers and sellers. Here's what it actually covers, and what it doesn't.

The legal basis

Under Indiana Code 32-21-5, sellers of most residential real estate with one to four units must complete a Seller's Residential Real Estate Sales Disclosure form and provide it to the buyer before closing. The form asks the seller to disclose known conditions of the roof, foundation, structure, mechanical systems (HVAC, electrical, plumbing), water and sewer, and any known hazardous conditions on the property.

It's a 'known conditions' disclosure, not a warranty

This is the part buyers most often misunderstand: the law only requires sellers to disclose defects they actually know about at the time they fill out the form. A seller who genuinely doesn't know their sump pump has been failing intermittently isn't violating the law by leaving that box unchecked. The disclosure form is not a guarantee of condition and it doesn't replace an inspection — it's a starting point, and an independent inspection is what actually verifies current condition regardless of what the seller knew, remembered, or disclosed.

Common exemptions

Several transaction types are exempt from the disclosure requirement entirely, including new construction never previously occupied, foreclosure and REO sales, transfers between co-owners or relatives, court-ordered transfers (probate, divorce), and sales by a government entity. If you're buying a foreclosure or an estate sale in particular, don't assume "no red flags on the disclosure" means anything reassuring — there may be no disclosure form in the file at all, which is very different from a clean one.

What happens if a seller lies on the form

If a seller knowingly conceals a material defect on the disclosure form, a buyer may have grounds for legal action after closing — but proving what the seller actually knew at the time can be difficult and expensive to litigate, and it's rarely a fast or cheap process even when a buyer is clearly in the right. This is exactly why a professional inspection during your due diligence period matters more than the disclosure form itself: it documents the home's actual condition independent of what anyone claims to have known or remembered.

How this connects to your inspection

Read the disclosure form before your inspection and flag anything vague or concerning for your inspector to pay extra attention to during the visit — a seller who checked "unknown" next to "roof leaks" is telling you exactly where to look closer. If you're the one selling, see our guide on pre-listing inspections. Getting ahead of issues before they show up on a buyer's report, and potentially conflict with what you already disclosed, protects you on both fronts at once.

Key takeaways

• Indiana Code 32-21-5 requires most sellers of 1–4 unit residential property to complete a formal disclosure form.
• Sellers must disclose known conditions only — the form is not a warranty and doesn't replace an independent inspection.
• New construction, foreclosures, REO sales, and transfers between relatives are commonly exempt from the disclosure requirement.
• Reading the disclosure form before your inspection helps you flag specific areas for the inspector to look at more closely.