National practice with Illinois examples
Property disclosure practice questions, with the facts that change each answer
Start with who knows what, then check the property, governing law and deadline. Disclosure communicates required information; an inspection investigates condition. A survey answers location questions. None automatically replaces the others. Try the six questions below, then use each changed fact to check whether you understand the rule rather than remember the letter.
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What should a disclosure answer do?
The June 24, 2026 PSI outline, national VII.A to VII.C, assigns Property Disclosures 7% of the national broker exam. It covers condition reports, inspection and survey clues, public and private land-use controls, environmental and government disclosures, material facts and material defects. The Illinois examples here apply state rules; do not assume their deadlines govern every national question.
| Clue | Useful follow-up | Avoid this shortcut |
|---|---|---|
| Recurring water entry or a contractor's report | Communicate required known facts and obtain a qualified condition evaluation | The wall is dry today, so the history does not matter |
| Garage or driveway near a disputed boundary | Survey for location, title review for recorded rights | A home inspector can settle the legal boundary |
| An addition or use that may conflict with zoning | Local building and zoning records; qualified advice on unresolved rights | Continued use proves permission |
| A recorded covenant limits sheds | Recorded declaration, title and association documents | Municipal approval removes every private restriction |
| Possible contamination, tank, asbestos or moisture issue | Relevant records and an appropriate specialist | A stain proves a particular contaminant or health risk |
A material fact is broader than a physical defect: a restriction on use can matter even when the building is sound. Visibility, actual knowledge and the governing duty still matter. Describe a red flag honestly; do not convert suspicion into a technical conclusion or guarantee.
How does the Illinois seller report work?
Check 765 ILCS 77/5 for covered property and the statutory seller definition. Property includes one to four residential dwelling units, condominium and cooperative units, and qualifying manufactured homes treated as real property. Never assume that every parcel, owner or transfer has identical coverage.
Section 15 lists seller exemptions. For example, never-occupied new construction is exempt under this Act, but rehabilitation of an existing property is not that new-construction exemption. A beneficiary who never occupied and never managed the property has a separate exclusion in Section 5. Nonoccupancy alone is not a blanket exemption for every owner.
| Event | Rule for a covered transfer | Source |
|---|---|---|
| Before signing the contract | Seller completes all report items and the buyer receives the report | Section 20 |
| Completing the answers | Disclose actually known material defects; this Act does not require a specific investigation | Section 25 |
| Before closing, an earlier answer becomes inaccurate | Provide a written supplemental disclosure when aware of the error, inaccuracy or omission | Section 30 |
| Checking delivery | Delivery is effective on buyer receipt, with receipt verifiable; sending alone is not the whole question | Section 50 |
Read the exact provisions in 20, 25, 30 and 50. Section 25 also protects specified innocent errors, a reasonable belief that a matter was corrected and qualified reliance without knowledge of error. Do not turn every historical repair into automatic liability or an excuse to ignore a known recurring problem.
The Section 35 form separately asks about current flood insurance, recurring basement or crawl-space flooding, and floodplain awareness. Those are different facts. It also permits as-is agreements and warns that the report is not an inspection or warranty.
Late delivery and a later supplement have different rules
Section 40(a) gives a buyer five business days after receipt to terminate when a report disclosing a material defect is improperly delivered after all parties signed. A yes to report item 1 or 2 alone does not trigger that stated material-defect rule.
For a supplement, 40(b) requires one of three conditions: the material defect results from an error the seller actually knew of when signing the earlier report; the defect cannot be repaired before closing; or the seller declines or fails to agree in writing to repair a repairable defect within five business days after supplemental delivery. Do not attach an automatic five-day cancellation period to every supplement.
Section 40(c) ends that termination right after conveyance and requires written notice delivered to at least one seller by a Section 50 method, using the specified contact information. Section 55 separately addresses failure or refusal to provide the report before conveyance and knowing violations. Individual cancellation, damages and contract advice belong with the transaction's attorney.
Does the seller's answer settle the broker's duty?
No. Under 225 ILCS 454/15-25, licensees must treat customers honestly and must not negligently or knowingly give false information. A seller's licensee must timely disclose actually known latent material adverse physical-condition facts that a reasonably diligent customer inspection would not discover.
Keep every condition in that rule. It is not a requirement to diagnose every visible stain, and a false seller answer does not erase the licensee's actual knowledge. The section's protection for client-supplied false information requires that the licensee lack actual knowledge of its falsity. For the client-side duties, use the client and customer comparison.
What must happen for lead and radon disclosures?
For covered pre-1978 housing, EPA's disclosure guide explains the known-information, available-records, pamphlet and warning process. 40 CFR 745.107 places it before the buyer or renter is obligated. If disclosure follows the offer, complete it before acceptance and allow review and possible amendment.
- 745.110: a buyer receives a ten-day lead inspection or risk-assessment opportunity unless the parties agree in writing to another period or the buyer waives the opportunity in writing. Waiving testing does not waive the required disclosures. The ten-day opportunity is for buyers, not a general tenant testing right.
- 745.113: use the required contract language, acknowledgments, signatures and dates; the seller or lessor and any covered agent must retain the completed disclosure attachment or applicable lease record for at least three years after sale completion or lease commencement.
- 745.115: covered agents have information and compliance responsibilities, with a qualified protection for seller knowledge hidden from them after they informed the seller of the obligations.
Check actual coverage and exemptions. 745.101(b) exempts leases of housing certified lead-paint-free under its conditions. Do not extend that lease exemption to an otherwise covered sale. The disclosure rule itself does not require the seller to test or remove all lead.
Illinois radon is a separate layer. 420 ILCS 46/10 requires the prescribed pamphlet and radon disclosure for covered sales before the buyer is obligated, with the form addressing known elevated concentrations and the relevant records. That section does not itself require seller testing or mitigation. If disclosure follows an offer, provide it before acceptance and allow review and possible amendment. Check the Act's exclusions separately; completing the general seller report does not replace this process.
Try six original property disclosure questions
These are original examples, not released or recalled PSI questions. Assume the stated facts and coverage. Choose an answer before opening its explanation.
1. A driveway may cross the boundary
A driveway appears to enter the neighboring parcel. The seller claims a right to use it, but no access document is available. Which follow-up most directly addresses both questions?
- A home inspection alone
- A survey and title review
- A seller statement locating the line by sight
- A zoning check alone
Show answer 1
B is correct. A addresses condition, not the legal location and recorded rights. B routes location to a survey and recorded rights to title review. C substitutes an unsupported estimate. D may inform use but does not settle either stated question.
Change the fact: a current survey confirms the driveway is inside the parcel, but its surface is heaving. Start with a qualified condition evaluation; a survey alone will not diagnose the surface problem.
2. The buyer waives the lead test
An otherwise covered 1966 house has an available lead report. The buyer signs a written waiver of the lead evaluation opportunity. What happens to the seller's disclosure process?
- The written testing waiver also waives the report and pamphlet
- The report can wait until closing because no test will occur
- Required disclosures still precede the buyer becoming obligated
- The seller must remove all lead before accepting the offer
Show answer 2
C is correct. A confuses the inspection opportunity with disclosure. B misses the pre-obligation timing. C preserves the separate duties. D invents an automatic remediation requirement under this disclosure rule.
Change the fact: no testing waiver is signed and the parties agree in writing to a seven-day evaluation period. The rule permits that agreed period; the disclosure duties remain.
3. A dry basement has a hidden history
In a covered Illinois sale, the seller's broker actually knows of recurring concealed basement leakage that a reasonably diligent buyer inspection would not discover. The seller marks no known leakage and instructs silence. Which response fits 15-25?
- Rely on the checked box despite the broker's knowledge
- Promise that current dry conditions prove a permanent repair
- Wait for the buyer to ask the exact question
- Timely disclose the known latent material adverse physical fact
Show answer 3
D is correct. A does not remove actual knowledge. B makes an unsupported guarantee. C adds a buyer-question condition absent from the stated rule. D retains the knowledge, materiality, physical-condition and inspection facts.
Change the fact: the broker only notices an unexplained odor. Describe that observation honestly and recommend qualified evaluation; the odor alone does not establish recurring leakage or mold.
4. The report arrives after signing
All parties signed a covered Illinois sale contract. Before conveyance, the buyer first receives the required report, which discloses known recurring basement flooding. Under 40(a), what period does the buyer have to exercise the stated termination right?
- Five business days after receipt of the report
- Five calendar days after the seller sends it
- Ten days after closing
- No right because signatures erase late delivery
Show answer 4
A is correct. A uses the statutory event and day type. B changes both. C uses the wrong event and extends the right beyond conveyance. D ignores the late material-defect report rule. Follow 40(c)'s written-notice requirements.
Change the fact: the report only answers yes to item 2, current flood insurance, with no material defect disclosed. That response alone does not trigger 40(a)'s material-defect termination rule.
5. A new defect is discovered before closing
After a timely report, a seller first learns of a material defect that can be repaired before closing, supplies a written supplement and agrees in writing within five business days after supplemental delivery to make that repair. Assume no earlier known reporting error. Does that supplement alone create a 40(b) termination right?
- Yes, every supplement restarts the late-report period
- No, none of 40(b)'s stated conditions is present
- Yes, all new defects are legally unrepairable
- No, supplements are never required
Show answer 5
B is correct. A imports 40(a)'s different trigger. B follows the stated facts. C contradicts repairability. D ignores Section 30. A separate contract remedy could still matter.
Change the fact: the material defect results from a reporting error the seller knew of when signing the earlier report. That satisfies the first 40(b) condition, even if a repair is now offered.
6. The seller calls a renovation new construction
An owner rehabilitates a previously occupied Illinois house and resells it. No other exemption applies. Does the renovation alone qualify for 77/15(9)'s never-occupied new-construction exemption?
- Yes, any new finishes create a new house
- No, the provision expressly excludes rehabilitation of existing property
- Yes, a broker can designate the transfer exempt
- No, because this Act has no seller exemptions
Show answer 6
B is correct. A changes a renovation into new construction. B follows the express distinction. C gives the broker a power the provision does not grant. D denies the actual exemption list.
Change the fact: it is genuinely newly constructed property that has never been occupied. That stated exemption can apply under this Act; other applicable duties need their own analysis.
Property disclosure practice questions answered
How many Property Disclosures questions are on the exam?
PSI assigns Property Disclosures 7% of the scored national broker portion. With 100 scored national questions, that corresponds to about seven questions. It is a whole-topic allocation, not a promise that one named disclosure law will appear a fixed number of times. These six original examples do not reproduce a full exam or predict a PSI score.
Does no known defect mean the home has no defects?
No. A seller's knowledge and the property's actual condition are different. The Illinois report expressly warns that lack of seller awareness is no guarantee that a problem does not exist. It also says the report does not replace inspections or negotiated warranties. Check the coverage and wording of the applicable disclosure rule.
Does as-is remove the seller report or broker duties?
No. For a covered Illinois sale, the statutory form permits an as-is agreement while still requiring the report. As-is does not authorize a false answer or erase the separate licensee duties discussed here. Repair obligations and termination options depend on the contract, applicable law and facts.
Use each missed answer to choose your next review
A correct letter is only the first check. Explain the governing duty, the fact that triggers it, the deadline and why the closest alternative fails. Then solve the changed version. A repeated score on these six examples does not establish exam readiness.
Use the Property Disclosures study guide for broader review, compare material facts and defects and review radon versus lead disclosures when those rules are easy to mix up. If short phone sessions suit your routine, you can download Pass Illinois for additional broker-exam preparation.