Illinois real estate exam glossary
Illinois seller disclosure
A checked “no” does not promise a perfect house. The seller’s report states actual knowledge, the buyer’s inspection investigates condition, and the broker has separate duties. For exam questions, first identify whether the document is the initial report or a supplement. Their timing and termination rules are different.
Last reviewed:
The short answer
A covered Illinois seller must complete all items on the statutory Residential Real Property Disclosure Report and deliver it before contract signing. The Act requires disclosure of actually known material defects without imposing a specific investigation or inquiry. Before closing, awareness of an error, inaccuracy or omission in a delivered report or supplement requires a written update. Delivery is effective on receipt. The report is not a warranty, an inspection substitute or a release from other applicable disclosure duties.
Reviewed October 27, 2026. Seller-condition disclosure appears in national VII.A.1 of the PSI Illinois broker outline, and Illinois IV.D covers the Residential Real Property Disclosure Act and material defects. The whole national Property Disclosures domain has seven of 100 scored national questions; the whole Illinois Disclosures domain has ten of 40 scored state questions across several subjects. Neither is a seller-report question quota. These questions are original teaching items, not recalled PSI questions or a validated readiness score.
Check coverage, knowledge, receipt and the specific remedy
- Check the property and transaction first. Section 5 includes real property improved with one to four residential dwelling units, residential cooperative units, and condominium units with the exclusive limited common elements that form an integral part of the unit. A manufactured home must qualify as real property under the specified conversion law; a label or assessment alone is not enough. Section 10 reaches specified transfers beyond an ordinary deed sale, including installment land contracts, beneficial-interest assignments, lease-options and ground-lease transactions, subject to Section 15.
- Identify the actual seller and any exemption. The definition includes specified legal or equitable interests and land-trust beneficiaries. Its beneficiary exclusion requires both never occupying the property and never having management responsibility. Do not turn that into an exemption for every nonoccupying owner, landlord, investor or entity. Section 15 has its own qualified transfer exemptions; match the actual actor and transaction rather than assuming every estate, trust, family or lender sale has the same result. The new-construction exemption concerns newly constructed property not previously occupied and expressly does not include rehabilitation. A renovated previously occupied home does not qualify merely because the current investor never lived there.
- Use the statutory report and its actual questions. Section 20 calls for all items to be completed. The current Section 35 form contains 24 numbered statements, not 24 identical material-defect questions. Item 1 concerns recent seller occupancy; item 2 concerns current flood-hazard insurance. Other statements address specified conditions, history or notices. Follow the explanation instructions, including the separate instruction when item 1 is answered no. Do not replace the form with an agent’s informal defect summary.
- Apply actual knowledge without promising complete condition information. The form defines awareness through actual notice or knowledge without a specific investigation. Section 25 requires actually known material defects to be disclosed and provides qualified protections for lack of knowledge, a reasonable belief of correction and specified information sources. A contractor’s opinion is not blanket protection if the seller knows the information is wrong. No investigation duty is not permission to conceal a known report, repair history or recurring symptom.
- Read materiality and corrected-condition rules together with the question. The form uses a substantial adverse value effect or significant impairment of future occupants’ health or safety, with the stated reasonable-correction qualification. That is different from a cosmetic preference. The form also asks certain historical questions; a current-condition note is not permission to erase a known past use specifically requested by a numbered statement. A new recurrence before closing can require a supplement.
- Establish receipt before contract signing. Section 50 permits the stated personal, fax, email, electronic, prepaid first-class-mail and alternative-service routes using the applicable contact information. Delivery is effective on receipt, which can be acknowledged or shown in another verifiable manner. Receipt by one prospective buyer, or by an authorized person acting for a buyer, has the statute’s deemed-delivery effect for all prospective buyers. A sent email to a mistyped address is not proof of receipt.
- Update delivered information before closing. Under Section 30, a seller who becomes aware of an error, inaccuracy or omission in a prior report or supplement must deliver a written supplemental disclosure by a Section 50 method. A later leak can make an earlier truthful answer inaccurate. Do not backdate the old report, rely on an oral aside or stop updating merely because the inspection period ended; contract rights and the statute are separate.
- Apply the initial late-report rule precisely. Section 40(a) concerns a report delivered after all parties signed, in violation of Section 20, that discloses a qualifying material defect. Its yes-response provision excludes items 1 and 2. The buyer may terminate within five business days after receipt under that provision, with the stated return of deposits and down payments. A late document or a yes to occupancy or flood insurance alone is not the same as establishing every condition of that remedy.
- Treat the supplement rule as three alternative grounds. Section 40(b) addresses a disclosed material defect attributable to an error the seller actually knew when the prior report was completed and signed; a defect not repairable before closing; or a repairable defect for which the seller declines or fails to agree in writing to repair within five business days after supplemental delivery. These are alternatives. The five-day repair-agreement provision concerns the seller’s written response; it is not a universal new five-day buyer option after every supplement. A timely written repair agreement addressing the third ground does not automatically defeat the separate first ground when the seller actually knew the earlier error.
- Separate a right to terminate from effective notice and conveyance. Section 40(c) requires written termination notice delivered to at least one seller by a Section 50 method at the applicable seller contact. Drafting or merely sending a notice does not establish effective delivery. The statutory termination right no longer exists after conveyance, while contract and Section 55 remedies are preserved as stated. Do not treat a buyer’s signature on a receipt acknowledgment as an automatic waiver of every defect right.
- Keep the missing-report and damages rules separate. Section 55 provides a termination right when the seller fails or refuses to provide the report before conveyance. Knowing violations or knowingly false information can give rise to actual damages and court costs; the court may award reasonable prevailing-party attorney fees. It is not automatic compensation for every later-discovered defect. Section 45 preserves other statutory and common-law duties and remedies; their requirements must be checked separately. Section 60 separately limits an action for violation of this Act to one year from the earliest of possession, occupancy or recording of a conveyance instrument. Do not substitute discovery, the latest event or a universal closing-date trigger, or extend that rule to every other kind of claim.
- Keep the broker’s duty and other disclosures in view. A seller’s licensee must timely disclose to prospective-buyer customers actually known latent material adverse physical facts that a reasonably diligent customer inspection would not discover, under Section 15-25. The seller’s no box does not erase that duty. The licensee must also treat customers honestly and avoid negligent or knowing false information. A seller report does not replace separately applicable lead, radon or other disclosure requirements, or the buyer’s inspections and negotiated protections.
| Checkpoint | Rule | Red flag |
|---|---|---|
| Coverage | Actual property, seller, transfer and Section 15 facts | Nonoccupancy or as is is not a blanket exemption |
| Knowledge | Actually known material defects; qualified protections | Known contrary information cannot be ignored |
| Form | 24 numbered statements with specific instructions | Occupancy and flood insurance are not automatically defects |
| Delivery | Effective on receipt; authorized and verifiable route | Sent is not necessarily received |
| Initial late report | Section 40(a): buyer five business days after receipt when conditions met | Not every late report gives the same remedy |
| Supplement | Three alternative grounds; seller five-day written repair-agreement rule in the third | Not a universal new buyer five-day window |
| Notice and conveyance | Written notice effectively delivered to at least one seller; conveyance cutoff | A draft notice is not a completed termination |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Disclosure report vs. inspection | The report states specified seller knowledge. Inspection has its own scope, access and professional limits; neither document guarantees discovery of every defect. | Seller knowledge versus professional investigation. |
| Actual knowledge vs. duty to investigate | The seller must disclose what is actually known but has no Act-created duty to conduct a special inquiry. | Known truth versus required search. |
| Material defect vs. cosmetic issue | A material defect substantially affects value or significantly impairs health or safety. Cosmetic preference generally does not. | Serious value or safety effect versus appearance. |
| Report vs. supplement | The report is the initial completed statutory form. A supplement corrects a later-known error, inaccuracy, or omission before closing. | Initial snapshot versus required update. |
| Sending vs. receipt | Sending starts the transmission. Statutory delivery becomes effective when the buyer receives the report. | Dispatched versus delivered. |
| Late report vs. no report | Section 40(a) has specific late-report/material-defect conditions and a buyer five-business-day receipt clock. Missing-report termination under Section 55 and supplemental grounds under Section 40(b) are separate. | Identify which document, trigger and actor the clock concerns. |
| As is vs. exempt | An as-is clause concerns the bargain and repair risk. Section 15 supplies actual statutory exemptions; as is alone is not one. | Condition bargain versus statutory exception. |
| Seller disclosure vs. licensee disclosure | The seller completes the report from actual knowledge. Section 15-25 separately governs the seller-licensee’s specified latent-physical-fact duty to prospective-buyer customers. | Owner form versus broker duty. |
| Report answer vs. warranty | An answer communicates actual knowledge as of the report date. A warranty promises a condition or result under its terms. | Knowledge statement versus guarantee. |
| Correction believed complete vs. recurring defect | A reasonable belief that a problem was corrected can protect an answer. New recurrence or evidence can require a supplement. | Reasonably resolved versus newly known problem. |
Work through the facts
Report before offer signature
A seller completes the current form from actual knowledge and emails it to the buyer. The buyer acknowledges receipt, reviews it, and then signs the purchase offer. Assume the seller, property and transfer are covered, all form items are complete, the email uses the buyer’s supplied contact and no other execution issue is presented.
- The covered seller completed all report items.
- Electronic delivery is an authorized method.
- Receipt occurred before contract signing.
Answer: The stated sequence satisfies the basic pre-contract report-delivery requirement. It does not prove that every factual answer or separate disclosure duty is satisfied.
As-is misconception
An owner of a covered two-flat refuses to complete the report because the proposed contract says the property is sold as is. No Section 15 exemption or excluded seller is supplied.
- The property falls within the one-to-four-unit definition.
- An as-is clause does not appear by itself in Section 15's exemptions.
- Repair allocation and truthful statutory disclosure are separate.
Answer: The as-is label alone does not excuse the report.
No duty to open walls
A seller has never observed moisture or received a report about a concealed wall cavity. The buyer argues that the seller should have opened the wall before answering the form.
- Section 25 uses actual knowledge.
- The Act imposes no specific investigation or inquiry duty on the seller.
- Fraud or contrary actual-knowledge evidence would change the analysis.
Answer: The Act does not impose a specific investigation or require opening the wall on these facts. The example does not excuse an actually known condition or determine every separate contract or common-law duty.
Leak appears after delivery
The seller truthfully answered no known roof leak. A severe storm later causes a leak before closing, and the seller sees water enter the attic. Assume the new information makes the earlier answer inaccurate and the transaction remains covered.
- The original answer may have been accurate when signed.
- The seller now knows the earlier report no longer reflects the condition.
- Section 30 requires a written supplement before closing.
Answer: Provide a written supplement through the authorized delivery process. The duty to update does not, by itself, decide whether any Section 40(b) termination ground is established.
Late report with material defect
All parties sign the covered contract before the buyer receives the initial report, violating Section 20. The report discloses a material foundation defect within Section 40(a). The exercise supplies effective receipt and effective delivery of the buyer’s written termination to one seller within the applicable five-business-day period and before conveyance; no disputed calendar, waiver or other notice issue is presented.
- This is the initial late report, not a later supplement.
- The material-defect, execution and timing conditions are supplied.
- The written termination was effectively delivered by an authorized Section 50 method to a proper seller contact.
Answer: Section 40(a) permits the stated termination and return of earnest-money deposits or down payments without the specified seller recourse. Merely sending a notice without effective delivery would not establish these facts.
Seller answered no, broker knows yes
The seller checks no known basement seepage. The listing licensee personally observed recurring concealed water entry during prior management but remains silent. Assume the licensee is engaged by the seller client, the buyer is a customer and a reasonably diligent buyer inspection would not discover the materially adverse physical condition.
- The seller's form does not erase the licensee's actual knowledge.
- The condition is latent and materially adverse on the facts.
- Section 15-25 creates an independent licensee duty to the prospective buyer customer.
Answer: The seller’s form does not remove the specified timely disclosure duty. The exercise supplies every Section 15-25 physical-fact condition; it does not impose a universal inspection warranty.
Email sent but never received
The seller sends the report to a mistyped email address before contract signing. The buyer never receives it and signs the contract unaware of the document.
- Email can be a permitted delivery method.
- Delivery is effective on receipt.
- A sent message to the wrong address does not prove receipt.
Answer: The facts do not establish effective pre-contract delivery. Investigate receipt and the applicable remedy; a transmission failure alone does not prove every Section 40(a) material-defect condition or an automatic damages award.
Never occupied, but managed the property
A beneficiary has never lived in a covered three-flat but personally managed its rentals. The exercise states that the transfer is not exempt under Section 15 and presents only the Section 5 beneficiary exclusion.
- The statutory exclusion requires both never occupying and never having management responsibility.
- The supplied management history defeats the second part of that exclusion.
- The exercise does not classify every fiduciary or trust transfer.
Answer: Never having occupied the home alone does not satisfy this beneficiary exclusion. Complete the seller and transfer analysis rather than inventing a blanket landlord or trust exemption.
Repair agreement does not erase another ground
A covered seller actually knew of a material foundation defect when completing and signing the earlier report but omitted it. A later supplement discloses that defect. Before conveyance, the seller agrees in writing within the stated five-business-day repair-response period to repair it. The exercise supplies an otherwise effective written termination and no other disputed notice or legal issue.
- Section 40(b)’s grounds are alternatives.
- The repair agreement addresses the third ground’s response issue.
- The supplied actual knowledge of the earlier omission independently presents the first ground.
Answer: The timely repair agreement alone does not eliminate the separately supplied first ground. Apply the actual statutory and notice facts; this is not a ruling on a private foundation dispute or every repair agreement.
The earliest event, not the last event
For an isolated Section 60 teaching exercise, possession occurs May 1, 2025, occupancy May 10, 2025, and recording May 15, 2025. Assume those are the relevant statutory events; no tolling, extension, disputed event or other legal issue is supplied.
- May 1 is the earliest of the three supplied dates.
- Its one-year calendar anniversary is May 1, 2026.
- Section 60 addresses an action under this Act; the other events do not reset the reference point.
Answer: Use the earliest supplied event for this statutory comparison. The anniversary illustration is not a live filing-deadline opinion and does not determine separate fraud, contract or other claims.
Mistakes to avoid
- Calling every residential property covered Apply the one-to-four-unit and listed-property definitions plus Section 15 exemptions.
- Calling every estate transfer exempt Match the actual fiduciary, court, beneficiary, occupancy, and management facts to the statute.
- Treating as is as exemption As-is terms do not alone eliminate the report duty.
- Making the broker answer for the seller The seller supplies and signs seller knowledge; the broker keeps independent duties.
- Requiring a seller investigation The Act requires actual knowledge, not a special search for unknown conditions.
- Allowing a known omission No investigation rule does not protect concealment or a knowingly false answer.
- Delivering at closing Section 20 requires buyer receipt before contract signing.
- Equating sent with delivered The statutory delivery is effective on receipt.
- Using the old three-business-day rule Current Section 40 gives five business days for the specified late-report material-defect remedy.
- Ignoring a post-report change Supplement known errors, inaccuracies, or omissions before closing.
- Assuming every supplement permits termination Apply the three current statutory grounds and the conveyance cutoff.
- Calling the report a warranty It reports knowledge and does not guarantee that unknown defects do not exist.
- Skipping buyer inspection The form expressly does not replace professional inspection or negotiated protections.
- Letting the broker rely blindly on the form A licensee must disclose actually known latent material adverse physical facts.
- Assuming the Act erases fraud claims Section 45 preserves other statutory and common-law duties and remedies.
- Giving the buyer a new five-day option after any supplement The third Section 40(b) ground uses five business days for the seller’s written repair agreement. The three alternative grounds and conveyance cutoff still control.
- Treating a yes to occupancy as a defect The form has different kinds of statements. Section 40(a)’s yes-response provision excludes items 1 and 2; other material-defect facts must be assessed.
Check your understanding
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. How many residential dwelling units fall within the Act’s stated improved-real-property definition, subject to seller and transfer rules?
- Only five to ten
- One to four
- Every commercial building
- No residential buildings
Show answer and explanation
Answer: B. One to four
Section 5 also identifies cooperative and condominium units and manufactured homes qualifying as real property under the specified law. Coverage still requires the actual seller and transfer analysis.
2. When must the covered seller complete and deliver the initial report?
- Only at conveyance
- Only after possession
- Before contract signing
- Only after the loan is approved
Show answer and explanation
Answer: C. Before contract signing
Section 20 requires all report items and pre-contract delivery. Section 50 makes delivery effective on receipt; the seller should preserve verifiable receipt information.
3. Which knowledge standard applies to the covered seller’s material-defect disclosure under this Act?
- An automatic duty to open every wall
- Only the buyer’s assumptions
- Actual knowledge
- Guaranteed perfection
Show answer and explanation
Answer: C. Actual knowledge
Section 25 requires actually known material defects but no specific investigation or inquiry under the Act. Other duties and qualified protection conditions remain separate.
4. Does an as-is clause alone excuse a covered seller from the statutory report?
- No; as is alone is not a statutory exemption
- Yes; if the buyer plans an inspection
- Yes; every as-is sale is exempt
- Yes; if the home is a two-flat
Show answer and explanation
Answer: A. No; as is alone is not a statutory exemption
The condition bargain and Section 15 exemption analysis are different. As-is wording alone does not erase truthful statutory disclosure or other applicable duties.
5. When is delivery of the report effective under Section 50?
- Upon receipt as provided by the statute
- When the file is drafted
- When a listing is published
- When an email is sent, whether received or not
Show answer and explanation
Answer: A. Upon receipt as provided by the statute
Receipt can be acknowledged or shown in another verifiable manner. The statute also has deemed-delivery rules for one buyer or an authorized recipient; do not impose a signed-form-only rule.
6. Before closing, a seller becomes aware of an error in an already-delivered report. What does Section 30 require?
- A written supplemental disclosure by an authorized method
- An oral comment instead of a supplement
- Destroying the earlier report
- No action once the inspection period ends
Show answer and explanation
Answer: A. A written supplemental disclosure by an authorized method
The rule reaches an error, inaccuracy or omission in a report or prior supplement. Preserve accurate dates and delivery; do not backdate the original.
7. The conditions of Section 40(a) are met for an initial late report disclosing a material defect. What is the buyer’s stated period?
- A universal thirty-day inspection period
- Three calendar years
- Five business days after receipt
- Five days after listing regardless of receipt
Show answer and explanation
Answer: C. Five business days after receipt
Apply the current five-business-day receipt rule and effective written notice before conveyance. It is not the third supplemental ground’s seller repair-agreement clock.
8. Which statement about the report is correct?
- It replaces all environmental and title review
- It prevents every later claim
- It guarantees every system works
- It is not a warranty or a substitute for inspection
Show answer and explanation
Answer: D. It is not a warranty or a substitute for inspection
It communicates specified actual knowledge. Unknown conditions can exist, and separate inspections, warranties, contract rights and statutory duties retain their own scope.
9. Who supplies and certifies the covered seller’s knowledge on the report?
- The recorder without consulting the seller
- The appraiser instead of the seller
- The covered seller
- The listing platform automatically
Show answer and explanation
Answer: C. The covered seller
The seller completes and certifies the report. A licensee should not invent factual answers and still has independent honesty and specified disclosure duties.
10. Can a seller’s licensee conceal an actually known latent material adverse physical fact, undiscoverable by a reasonably diligent prospective-buyer customer inspection, merely because the seller checked no?
- Yes; if the contract says as is
- Yes; the no box controls every duty
- No; the supplied facts trigger the separate Section 15-25 duty
- Yes; whenever the broker did not cause the defect
Show answer and explanation
Answer: C. No; the supplied facts trigger the separate Section 15-25 duty
The question supplies the seller-client, prospective-buyer-customer, actual-knowledge, physical, material, latent and inspection conditions. The report does not erase that duty.
11. A beneficiary never occupied a home but managed it. With no other exemption supplied, does the Section 5 beneficiary exclusion apply?
- No; the exclusion requires both never occupying and never managing
- Yes; management automatically replaces disclosure
- Yes; every investor is excluded
- Yes; nonoccupancy alone is enough
Show answer and explanation
Answer: A. No; the exclusion requires both never occupying and never managing
The statutory conditions are conjunctive. The example does not decide a separate fiduciary-transfer exemption or imply every nonoccupying owner is excluded.
12. A current report’s item 1 is answered no. What does its specific instruction require?
- Treat the transfer as automatically exempt
- Leave every other item blank
- Have the broker guess the answer
- Identify capacity or explain the relationship to the property
Show answer and explanation
Answer: D. Identify capacity or explain the relationship to the property
Item 1 asks about occupancy within the last twelve months and contains a separate no-answer instruction. Other items have their own explanation requirements; nonoccupancy is not a universal exemption.
13. Which person’s response is measured by the five-business-day repair-agreement provision in Section 40(b)(iii)?
- The buyer’s automatic cancellation after any supplement
- The inspector’s promise to waive every defect
- The seller’s written agreement to repair the repairable material defect
- The appraiser’s value revision
Show answer and explanation
Answer: C. The seller’s written agreement to repair the repairable material defect
That is the third alternative supplemental ground. It does not erase the other two grounds or create an automatic fresh five-day buyer option after every supplement.
14. Two prospective buyers are named. One receives the report through the proper Section 50 process. What does that section provide?
- The report automatically becomes a warranty
- The seller no longer has to supplement
- Delivery to one prospective buyer is deemed delivery to all
- Every buyer must separately sign before any delivery can count
Show answer and explanation
Answer: C. Delivery to one prospective buyer is deemed delivery to all
Read the statutory deemed-delivery rule and actual receipt facts. An authorized person acting for a buyer is separately addressed. This does not decide every other contract notice requirement.
15. Does this Act eliminate other applicable disclosure and fraud remedies?
- No; Section 45 preserves the stated other duties and remedies
- Yes; if the buyer acknowledged receipt
- Yes; it bars all common-law claims
- Yes; it replaces every contract
Show answer and explanation
Answer: A. No; Section 45 preserves the stated other duties and remedies
Other statutes, common-law fraud, misrepresentation, deceit and applicable contract remedies have their own conditions. A receipt acknowledgment is not an automatic waiver of them all.
16. The only yes answers in an initial late report concern occupancy and current flood-hazard insurance, with no other material defect supplied. Does that alone establish Section 40(a)’s yes-response trigger?
- Yes; every yes answer is a defect
- No; that provision excludes items 1 and 2
- Yes; flood insurance itself proves foundation failure
- Yes; every late report has identical remedies
Show answer and explanation
Answer: B. No; that provision excludes items 1 and 2
The numbered questions are not all material-defect questions. Do not infer undisclosed defect facts or confuse this with the separate missing-report or contract remedies.
17. Is a seller exempt merely because the seller is a nonoccupying investor?
- Yes; only owner-occupants can be sellers
- Yes; all rental homes are excluded
- Yes; no investor has actual knowledge
- No; the actual seller and Section 15 transfer rules must be applied
Show answer and explanation
Answer: D. No; the actual seller and Section 15 transfer rules must be applied
The beneficiary exclusion has its own two conditions, and Section 15 has specific transfer exemptions. Nonoccupancy alone is not a blanket investor exemption.
18. A seller learns before closing that a previously corrected leak has recurred and the delivered report is now inaccurate. What is the relevant next statutory step?
- Provide a written supplement under Section 30
- Conceal the recurrence because a repair once occurred
- Assume the original date eliminates all duties
- Replace actual knowledge with a broker’s guess
Show answer and explanation
Answer: A. Provide a written supplement under Section 30
A reasonable prior belief of correction and new awareness are different facts. The supplement requirement does not by itself establish a buyer termination ground or decide every repair remedy.
19. For an otherwise valid Section 40 termination, what does subsection (c) require about notice?
- Written notice effectively delivered to at least one seller through the stated method and contact rules
- Delivery only after conveyance
- Only a verbal complaint to a neighbor
- An unsent draft in the buyer’s notes
Show answer and explanation
Answer: A. Written notice effectively delivered to at least one seller through the stated method and contact rules
The conveyance cutoff, actual contact information, permitted method and delivery matter. Do not replace receipt-based delivery with a universal sent-is-enough rule.
20. A seller relies on a contractor’s information within the contractor’s occupation but actually knows it is false. Is that the qualified Section 25(a)(iii) protection?
- Yes; every contractor statement is absolute immunity
- No; the protection includes lack of knowledge of the error
- Yes; if the seller avoids reading contrary evidence
- Yes; even knowingly false information is protected
Show answer and explanation
Answer: B. No; the protection includes lack of knowledge of the error
The specified-source provision has actual conditions. It is not a universal safe harbor for every consultant or every statement, and it does not excuse known errors.
21. Which statement about Section 55 damages and fees is accurate?
- Every claimant is guaranteed all attorney fees
- Unknown defects alone always establish liability
- Knowing violations or knowingly false information can support actual damages and court costs; reasonable prevailing-party attorney fees are discretionary
- Every newly found defect automatically produces punitive damages
Show answer and explanation
Answer: C. Knowing violations or knowingly false information can support actual damages and court costs; reasonable prevailing-party attorney fees are discretionary
The statute has knowledge and duty conditions and states that the court may award reasonable prevailing-party fees. It does not guarantee an award or decide every private causation, damages or contract issue.
22. For Section 60, which of possession May 1, occupancy May 10 and recording May 15 supplies the stated reference event, assuming those dates are the relevant events?
- Whenever the defect is discovered
- Possession on May 1, the earliest event
- Only the date of an inspection report
- Recording on May 15, the latest event
Show answer and explanation
Answer: B. Possession on May 1, the earliest event
The Act’s one-year rule uses the earliest specified event. This is not a calculation of an actual filing deadline, a tolling decision or a limitation for every separate claim.
23. The seller actually knew of the earlier omitted material defect. A supplement discloses it and the seller timely agrees in writing to repair. Does that agreement alone eliminate every Section 40(b) ground?
- No; the separately supplied actual-known-omission ground remains to be assessed
- Yes; supplements can never support termination
- Yes; the buyer is automatically required to convey
- Yes; a repair promise always eliminates every ground
Show answer and explanation
Answer: A. No; the separately supplied actual-known-omission ground remains to be assessed
The three grounds are alternatives. Addressing the third ground’s repair-response requirement does not automatically defeat the first ground. Actual termination still needs the applicable written-delivery and conveyance facts.
24. A previously occupied house is rehabilitated and resold by an investor who never lived there. With no other exemption supplied, what does Section 15’s new-construction exemption establish?
- Rehabilitation does not qualify merely because the current investor never occupied the home
- A fresh coat of paint removes all disclosure duties
- Every investor sale is automatically exempt
- Every renovated home is newly constructed for the exemption
Show answer and explanation
Answer: A. Rehabilitation does not qualify merely because the current investor never occupied the home
The identified exemption concerns newly constructed, previously unoccupied property and expressly excludes rehabilitation. Apply other seller and transfer rules separately rather than inventing a blanket result.
Common questions
What is the Illinois seller disclosure report?
It is the statutory report of specified conditions based on the covered seller’s actual knowledge. It should reach the buyer before contract signing, and known errors or omissions require the stated preclosing written update. It is not a home inspection, appraisal, title report or warranty that every unknown condition is absent.
Which properties and transfers are covered?
Section 5 includes one-to-four-unit residential real property, residential cooperative units, and condominium units with exclusive integral limited common elements. A manufactured home must qualify as real property under the specified conversion law. Section 10 includes sales, exchanges, installment land contracts, beneficial-interest assignments, lease-options and ground-lease transactions, subject to Section 15. A property label alone does not resolve coverage, and this form is not a general rental flood-disclosure form.
Are estates, trusts, investors and as-is sales exempt?
Apply the actual statutory facts. Section 15 lists qualified transfer exemptions, including specified court, fiduciary, family, foreclosure, government and new-construction circumstances. The separate beneficiary exclusion requires both never occupying and never having management responsibility. An as-is label, never living in the home or calling an owner an investor does not by itself create an exemption. A claimed estate or trust exemption needs the actual actor and administration or transfer facts reviewed.
When must the report be delivered?
Section 20 requires a completed written report before contract signing. Section 50 makes delivery effective on receipt, not automatically on dispatch. Use the actual prescribed contact and delivery route and retain verifiable receipt information. A permitted electronic method does not make a failed or misaddressed transmission effective.
Must the seller inspect or open walls first?
The Act does not impose a specific investigation or inquiry to complete the report. It does require disclosure of actually known material defects and accurate answers to the form. Known contrary information, recurrence or a later-recognized error cannot be ignored merely because no separate investigation was required. Other contract, statutory or common-law duties need their own analysis.
What counts as a material defect?
The form describes a condition with a substantial adverse effect on value or significant impairment of future occupants’ health or safety, unless the seller reasonably believes it has been corrected. Do not treat every cosmetic preference as material. Read historical and notice-based statements as written, and update the report if later awareness makes an earlier answer inaccurate. The form’s definition does not decide every separate legal claim.
What does the form ask about, and how are answers explained?
The current statutory form has 24 numbered statements. They include recent occupancy, current flood-hazard insurance, specified water, structure and system issues, environmental conditions, tanks, boundary disputes, uncorrected violation notices and past methamphetamine manufacture. They are not 24 interchangeable physical-defect questions. Follow the yes and not-applicable explanation instructions and item 1’s separate instruction to explain capacity or relationship when answered no. This guide does not complete the form for an owner.
Must the seller update a report that was truthful when signed?
Yes, when Section 30’s conditions are met: before closing, a seller becomes aware of an error, inaccuracy or omission in a delivered report or prior supplement. Deliver a written supplemental disclosure through a Section 50 method. New information or a changed condition can make the old answer inaccurate. Do not backdate the earlier report or assume the buyer’s inspection period ends the statutory update duty.
Can the buyer cancel after a late initial report?
Section 40(a) has specific conditions: delivery after all parties signed, in violation of Section 20, and a qualifying disclosed material defect. Its yes-response provision excludes items 1 and 2. When it applies, the buyer has five business days after receipt to terminate, with the stated return of deposits or down payments, and must satisfy the written delivery requirements before conveyance. A late report alone does not establish every condition or decide separate contract rights.
Does every supplement give the buyer a new five days to cancel?
No. Section 40(b) lists three alternative grounds: the material defect arises from an error, inaccuracy or omission actually known when the prior report was completed and signed; it is not repairable before closing; or it is repairable but the seller declines or fails to agree in writing to repair within five business days after supplemental delivery. The third ground’s clock concerns the seller’s written repair agreement. It is not a universal new five-day buyer cancellation option. Written notice, conveyance and other applicable rights still matter.
How must a Section 40 termination be communicated?
Subsection (c) calls for written notice delivered to at least one seller by a Section 50 method at the applicable seller contact information. An unsent draft or an oral complaint does not establish that step. Apply actual receipt, timing and notice facts rather than assuming a sent timestamp is enough. The statutory termination right ends after conveyance; contract and Section 55 remedies are preserved as stated.
Does one buyer’s receipt count when several buyers are named?
Section 50 deems delivery to one prospective buyer delivery to all prospective buyers. Delivery to an authorized person acting for a buyer also has the stated effect. Receipt can be acknowledged on the report or an agreement, or shown in another verifiable manner. These rules do not make every broker an authorized recipient or decide unrelated contract notice provisions.
Does as is remove the broker’s disclosure duty?
No. The seller’s condition bargain and report do not erase the seller-licensee’s specific Section 15-25 duty: timely disclosure to prospective-buyer customers of actually known latent material adverse physical facts not discoverable by a reasonably diligent customer inspection. The licensee also must treat customers honestly and avoid negligent or knowing false information. The facts and relationship matter; the section is not a universal duty to discover every hidden problem.
Does this report replace lead, radon or buyer inspections?
No. Section 45 preserves other applicable statutory and common-law disclosure obligations and remedies. Separate lead, radon and other requirements depend on their own property, transaction and exemption rules. Buyer inspections, negotiated warranties and contract rights have their own scope. A completed seller report is not a substitute for all of them or an instruction to skip due diligence.
What if the seller refuses to provide the report?
Section 55 gives the prospective buyer a termination right when the seller fails or refuses to provide the report before conveyance. Do not assume that signing an as-is contract excuses a covered seller, or that waiting until closing is compliant delivery. A missing report, a late initial report and a supplement have different statutory facts. A live file requires the actual notice, delivery, conveyance, contract and remedy issues reviewed.
Is the seller automatically liable for every defect found after closing?
No. Section 25 has qualified protections, including the stated lack-of-knowledge, reasonable-correction and specified-information-source conditions. Known contrary information is important; a contractor statement is not absolute immunity. Section 55 addresses knowing violations or knowingly false report information, actual damages and court costs. Reasonable prevailing-party attorney fees are a court discretion, not a guaranteed payment to every claimant. Separate fraud or contract claims require their own elements.
Is a renovated home exempt as new construction?
Not just because it looks new or the current owner never lived there. The Section 15 new-construction exemption concerns newly constructed property not previously occupied and expressly excludes rehabilitation. Other exemptions have their own facts. An estate, trust, investor or lender label is not a substitute for identifying the actual qualifying transfer and seller role.
Can the buyer cancel or sue after conveyance?
The Section 40 statutory termination right no longer exists after conveyance. That cutoff is different from the availability and time limits of other remedies. Section 60 addresses an action for violation of this Act and uses one year from the earliest of possession, occupancy or recording of the conveyance instrument. It is not automatically one year from discovery, the latest event or the closing date, and is not the rule for every fraud or contract claim. Actual limitation, tolling, notice and remedies require review of the live facts and governing law.
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Official sources and scope
Sources and identified provisions reviewed through October 27, 2026. The current statutory form and Sections 5 through 60 are read with the separate seller-licensee customer duty. Current indexed statutory text is distinguished from old strikeouts and case excerpts using an earlier form. Examples supply coverage, knowledge, materiality, receipt and notice facts; they do not complete a private form, calculate a live legal deadline or resolve an exemption, defect or remedy dispute.
- 765 ILCS 77/5: covered property and seller definitions
- 765 ILCS 77/10: covered transaction types
- 765 ILCS 77/15: nine seller-transfer exemptions
- 765 ILCS 77/20: complete report before contract signing
- 765 ILCS 77/25: actual knowledge and qualified seller protection
- 765 ILCS 77/30: written preclosing supplement
- 765 ILCS 77/35: current report, definitions and 24 statements
- 765 ILCS 77/40: initial report and supplemental defect remedies
- 765 ILCS 77/45: other law and remedies preserved
- 765 ILCS 77/50: delivery methods, receipt and multiple buyers
- 765 ILCS 77/55: missing report and knowing violations
- 765 ILCS 77/60: earliest-event one-year limit
- 225 ILCS 454/15-25: customer protections
- PSI June 24, 2026: national VII.A.1 and Illinois IV.D seller disclosure
This is exam preparation, not advice for a specific transaction. State law and the applicable facts control. Our editorial and corrections process explains how to report an issue.