Illinois seller disclosure and material defects

1. A landlord who never lived there

An individual owns and manages a covered duplex but has never lived in it. No Section 15 exemption applies. The owner argues that nonoccupancy alone eliminates the report.

1. Nonoccupancy is not a blanket owner exemption.
2. Even the separate beneficiary exclusion requires both no occupancy and no management responsibility.

Answer: The stated owner must comply; never living there is insufficient.

2. A renovated home

A seller extensively renovates a previously occupied house and calls it new construction. No other exemption applies.

1. Section 15(9) excludes rehabilitation of existing residential property from its new-construction exemption.

Answer: Renovation alone does not establish this exemption.

3. An existing structural report

Before completing the report, a seller reads an engineer's finding of an unrepaired foundation condition that substantially harms the home's value. The seller says no new investigation was required.

1. No special inquiry is required to complete the report.
2. That does not eliminate actual knowledge of the described material defect.

Answer: Disclose the actually known defect; the no-investigation rule is not permission to ignore received information.

4. A truly late initial report

Both parties have signed by noon. At 1:00 p.m. the seller emails the initial report; verifiable buyer receipt occurs at 1:20 p.m. It discloses an unrepaired structural defect that substantially harms value. Conveyance has not occurred.

1. All parties signed before receipt of the initial report.
2. The report discloses a material defect, not merely occupancy or flood insurance.
3. Section 40(a) permits termination within five business days after receipt, with the specified deposit return, using the required written notice.

Answer: The late-report branch applies. The sent time is not a substitute for effective receipt.

5. The only yes answers are occupancy and insurance

An initial report received after all parties signed has yes answers only to statements 1 and 2. Assume no other disclosed material defect.

1. Section 40(a) expressly excludes those two numbered answers as its yes-answer trigger.
2. The initial delivery still did not meet Section 20. Other applicable rights require separate facts.

Answer: Those answers alone do not establish Section 40(a) termination.

6. A new defect after a timely report

After a timely accurate report, a storm causes a material roof defect. The seller becomes aware before closing. It is repairable before closing and the seller agrees in writing to repair within five business days after delivery of the supplement. Assume no previously known report error. The seller has not declined repair during that period.

1. A written supplement is required under Section 30.
2. On these stated facts, none of Section 40(b)'s three termination conditions is established.

Answer: Do not infer automatic statutory cancellation just because the supplement discloses a defect. The contract and actual repair performance still matter.

7. An oral repair promise

A material defect first disclosed in a supplement is repairable before closing. Within the five-business-day period the seller offers only an oral promise; no written repair agreement is made. No conveyance has occurred.

1. Section 40(b)(iii) specifies agreement in writing to repair.
2. An oral promise alone does not satisfy that written-agreement condition.

Answer: The stated failure to agree in writing supports the Section 40(b)(iii) branch. A buyer still needs compliant written termination notice before conveyance.

8. A defect the seller already knew

A supplement reveals a material defect resulting from an omission the seller actually knew about when signing the prior report. The seller now offers a written repair agreement.

1. Prior actual knowledge supplies the separate Section 40(b)(i) condition.
2. The three conditions are alternatives, so a repair offer does not erase that stated condition.

Answer: Evaluate the prior-knowledge branch, not only whether repair was offered.

9. Early possession and later recording

For a Section 60 question only, assume possession starts October 20, 2026, occupancy starts October 22 and the conveyance instrument is recorded October 26.

1. The earliest specified event is possession on October 20.
2. A one-year anniversary comparison points to October 20, 2027, not October 26. Filing and any other legal timing issues need their own analysis.

Answer: The statutory starting event is October 20, 2026; this is not a universal deadline for every possible claim.

10. The broker knows more than the form says

A seller's licensee actually knows of a latent material adverse physical defect that a reasonably diligent inspection would not reveal to the prospective-buyer customer. The seller refuses to correct a false answer.

1. The licensee has a separate timely disclosure duty under Section 15-25.
2. Passing along the form or withdrawing does not itself substitute for that required disclosure.

Answer: Address the actual known fact and the separate statutory duty; do not treat the seller's signature as protection for silence.

1. An owner manages a covered duplex but never lived there. No transfer exemption applies. Which statement is best?

1. The report is required only after possession.
2. Only the buyer must complete the report.
3. The owner must comply; nonoccupancy alone is insufficient.
4. Nonoccupancy alone exempts every owner.

2. Which fact fits Section 15(9), assuming its stated facts are true?

1. An existing house was freshly painted.
2. A rental owner has not personally lived in the building.
3. A previously occupied home was completely rehabilitated.
4. Newly constructed residential real property has never been occupied.

3. A seller has read a reliable report identifying an unrepaired condition that substantially harms property value. What does the no-specific-investigation rule mean?

1. No new investigation is required by this Act, but actually known material defects must be disclosed.
2. The condition need not be considered if the sale is as-is.
3. Only an inspector has knowledge.
4. The seller may ignore information already received.

4. When must a covered seller deliver the initial written report under Section 20?

1. Only if an inspection fails.
2. Before the signing of a contract.
3. Only after all parties sign.
4. At any time within one year after recording.

5. Both parties signed before the initial report was received. The report discloses a qualifying material defect and no conveyance has occurred. Which rule applies?

1. Every buyer has 30 calendar days after mailing.
2. Section 40(a) permits termination within five business days after receipt with its notice and deposit-return requirements.
3. Only the supplement repair-response rule can apply.
4. The report is necessarily a warranty.

6. A late initial report answers yes only to occupancy and flood insurance, with no other material defect disclosed. What follows under Section 40(a) alone?

1. Occupancy is always a latent physical defect.
2. There was necessarily timely delivery.
3. All yes answers automatically trigger termination.
4. Those two answers alone do not establish its trigger.

7. Before closing a seller discovers that a delivered report contains a known error. What does Section 30 require?

1. Give only an oral assurance.
2. Wait until recording.
3. Ask the broker to erase the old report without replacement.
4. Provide a written supplemental disclosure by a Section 50 method.

8. A newly discovered supplemental material defect is repairable before closing. Within five business days after delivery, the seller agrees in writing to repair and has not declined repair. No earlier known error exists. Which answer is best on these facts?

1. A written agreement is the same as proof the repair was completed.
2. No Section 40(b) termination condition is established merely by that disclosure.
3. Any supplement always gives the buyer five business days to cancel.
4. The seller never needed a supplement.

9. A supplemental material defect resulted from an omission the seller actually knew about when signing the prior report. The seller now offers a written repair agreement. Which distinction matters?

1. Repair offers erase all previous knowledge.
2. Section 40(b)(i) is an alternative condition that is not erased simply by offering repair.
3. Only Section 40(a) can ever apply to a supplement.
4. A buyer must wait until after conveyance to terminate under Section 40.

10. Which statement accurately describes delivery under Section 50?

1. Receipt by one prospective buyer is deemed receipt for all, and delivery is effective upon receipt.
2. Email dispatch is always effective receipt.
3. Only personal hand delivery is valid.
4. A buyer must always sign the report for any receipt to be provable.

11. For an action under this Act, possession is October 20, occupancy October 22 and recording October 26. Which event starts Section 60's one-year comparison?

1. Only recording.
2. The date an inspector later discovers damage.
3. Always the latest event.
4. The earliest specified event: possession on October 20.

12. A seller's licensee actually knows a latent material adverse physical fact that a reasonably diligent inspection would not reveal to a prospective-buyer customer. The seller's report omits it. What is best?

1. The buyer's customer status removes every licensee duty.
2. The licensee must address the separate timely disclosure duty under Section 15-25.
3. The seller signature extinguishes the licensee's knowledge.
4. As-is terms always authorize silence.