Selling a Home As Is in Illinois: Disclosure Rules

Selling a home "as is" in Illinois does not remove the seller's duty to complete the state disclosure report. The Residential Real Property Disclosure Act, 765 ILCS 77, says in its own form that the report "does not limit the parties' right to contract for the sale of residential real property in 'as is' condition," and the same statute says the seller must disclose material defects of which the seller has actual knowledge. So "as is" is a term about repairs and price that two parties can agree to, and the disclosure duty sits beside it.

If you are weighing homes for sale in Rockford and you see "as is" in a listing, that phrase deserves a careful read before you write an offer. Gambino Realtors has been in business since 1923 and is based in Rockford. This guide stays with the text of the law. It walks through what the Act requires, which sellers it exempts, what happens when a defect surfaces late, and which other Illinois and federal rules keep operating when a contract says "as is." For the report itself, line by line, see our guide to Illinois Seller Disclosure Report in Rockford. We will not repeat that walk-through here.

One limit up front. This is a reading of statutes, not legal advice. The Act's own form tells sellers they may wish to consult an attorney, and the same is sensible for buyers. No court opinion from an official court page is cited in this guide, so it does not describe case law. Where the Act points to common law, the guide says so and stops.

What "As Is" Does And Does Not Change

Start with the words the legislature chose. Section 35 of the Act sets out the report form that every covered seller must use. At the top, a notice in capital letters says the purpose of the report is to give prospective buyers information about material defects in the property before the signing of a contract. It then says the report does not limit the parties' right to contract for the sale in "as is" condition. So the statute recognizes "as is" sales by name. Nothing in the Act bans them.

The same notice adds two more points. It says that under common law, sellers who disclose material defects may be under a continuing obligation to advise prospective buyers about the condition of the property even after the report is delivered. And it says that completing the report creates legal obligations on the seller, which is why the seller may wish to consult an attorney before completing it. Both sentences are printed on the form that the General Assembly wrote into the statute.

The buyer's side of the form carries a matching acknowledgment. In capital letters, it says the prospective buyer is aware that the parties may choose to negotiate an agreement for the sale of the property subject to any or all material defects disclosed in the report, which the form labels "as is." It also says the disclosure is not a substitute for any inspections or warranties that the buyer or seller may wish to obtain or negotiate. A bolded sentence follows: the fact that the seller is not aware of a particular condition or problem is no guarantee that it does not exist. And the buyer is told that the buyer may request an inspection of the premises performed by a qualified professional.

Put those pieces together. The report is the seller's written statement under the Act, and the form says the parties may still contract for an "as is" sale. The two can sit in the same transaction, because the form itself says so. What the statute does not say is that an "as is" clause cancels the report. The statute text contains no such rule.

Here is a simple illustration, offered only to show how the pieces fit and not as a prediction about any real sale. Suppose a seller's report answers "yes" to the item about basement flooding or recurring leakage, and the contract then says the buyer accepts the property "as is." The buyer has received the seller's disclosure of a known condition and has agreed to take the house with it. The Act's form describes exactly that arrangement, a sale subject to the material defects disclosed in the report. Now change the facts. Suppose the seller knew about a serious foundation problem, left that item unanswered or answered it falsely, and the contract says "as is." The Act has a separate section for knowingly false answers, which we cover below. The "as is" label in the contract is not mentioned in that section as a defense.

That last point deserves care, so we will state it narrowly. We are saying the text of Section 55 does not list an "as is" clause as an exception. We are not saying how a court would rule on any particular dispute. Only a judge can do that, after hearing the facts, and a buyer or seller with a real dispute needs a lawyer.

Which sellers must give the report in the first place? Section 10 says the Act applies to any transfer by sale, exchange, installment land sale contract, assignment of beneficial interest, lease with an option to purchase, ground lease, or assignment of a ground lease of residential real property. Section 5 defines residential real property as property improved with not less than one and not more than four residential dwelling units, units in residential cooperatives, and condominium units, including the limited common elements allocated to the exclusive use of the unit. A manufactured home that qualifies as real property under Illinois law is included too. So a single-family house, a duplex and a four-unit building all fall inside the definition.

The Duties That Remain In An As-Is Sale

Section 20 sets the basic requirement in two sentences. The seller completes all items in the report, and delivers the written report to the prospective buyer before the signing of a contract. The Act defines a contract in Section 5 as a written agreement by the seller and the buyer that would, subject to the satisfaction of any negotiated contingencies, require the buyer to accept a transfer. The timing matters, because the report is meant to be in the buyer's hands first. Section 50 lists the allowed ways to deliver it: personal delivery, fax, email or other electronic delivery to the contact information given by the buyer or shown in the contract, first class mail, or an alternative delivery service such as Federal Express or UPS.

The standard for what the seller has to say comes from Section 25 and the form's definitions. The seller must disclose material defects of which the seller has actual knowledge. The form defines "aware" as having actual notice or actual knowledge without any specific investigation or inquiry. Section 25 also says the Act does not obligate the seller to make any specific investigation or inquiry in an effort to complete the disclosure statement. So the report reflects what the seller already knows. A seller is not required by this Act to hire an inspector, crawl the attic or test the water in order to fill in the form.

The form defines a "material defect" as a condition that would have a substantial adverse effect on the value of the property or that would significantly impair the health or safety of future occupants, unless the seller reasonably believes the condition has been corrected. It then lists twenty-four items. When the seller answers "yes" or "not applicable" to any item except the first, the form requires an explanation in the additional information area.

The Act also tells us when a seller is not liable. Under Section 25, the seller is not liable for an error, inaccuracy or omission in the information delivered if one of three things is true. The seller had no knowledge of the error. Or the error was based on a reasonable belief that a material defect or other matter not disclosed had been corrected. Or the error was based on information provided by a public agency, a licensed engineer, a land surveyor, a structural pest control operator, or a contractor about matters within the scope of the contractor's occupation, and the seller had no knowledge of the error. Read closely, each of those protections turns on what the seller knew or reasonably believed. None of them turns on whether the contract said "as is."

A seller's duties do not end the day the report is handed over. Section 30 says that if, before closing, a seller becomes aware of an error, inaccuracy or omission in a prior report or supplement after delivering it, the seller shall supplement it with a written supplemental disclosure. The form repeats this in the seller's certification, which acknowledges a continuing obligation under Section 30 to supplement the disclosure before closing. This is a statutory duty running up to closing, and it comes from the Act's text. An "as is" clause is not mentioned in Section 30.

Now the buyer's remedies. Section 40 gives two distinct situations. The buyer then has five business days after receiving the report to terminate the contract, with return of all earnest money deposits or down payments and without liability to or recourse by the seller. In the second situation, a seller discloses a material defect in a supplement. Here the buyer has no right to terminate unless one of three conditions holds. The defect resulted from an error or omission the seller actually knew about when the earlier disclosure was signed. Or the defect cannot be repaired before closing. Or it can be repaired before closing, but within five business days after the supplement is delivered the seller declines or fails to agree in writing to repair it.

Two more rules in Section 40 are easy to miss. The right to terminate no longer exists after the conveyance of the property. The section closes by saying that nothing in the first two subsections limits the remedies available under the contract or Section 55. So the contract itself matters. An "as is" contract and a contract with repair obligations can give a buyer different remedies, and only the signed contract tells you which you have.

Section 55 covers the harder cases. If the seller fails or refuses to provide the disclosure report before the conveyance, the prospective buyer has the right to terminate the contract. And a seller who knowingly violates or fails to perform any duty under the Act, or who discloses any information on the report that the seller knows to be false, is liable for actual damages and court costs. The court may award reasonable attorney's fees to the prevailing party. Notice the word "knowingly" and the phrase "knows to be false."

There is also a clock. Section 60 says no action for a violation of the Act may be commenced later than one year from the earlier of the date of possession, the date of occupancy, or the date of recording of an instrument of conveyance of the residential real property. A buyer who moves in and finds a problem has a short window to bring a claim under this Act specifically.

Finally, the exemptions. Section 15 lists transfers that are exempt from the Act whether or not a report is delivered. They include transfers under a court order such as probate administration, a judgment of dissolution, a bankruptcy trustee's transfer or eminent domain. They include a deed in lieu of foreclosure, a judicial deed issued after a foreclosure sale, and a transfer by a lender that acquired the property that way. They include transfers by a fiduciary administering an estate, guardianship, conservatorship or trust, transfers between co-owners, transfers from a decedent, and transfers to a spouse or to a person in the lineal line of consanguinity of one or more of the sellers. Transfers to or from a government entity are exempt, and so are transfers of newly constructed property that has never been occupied, though not rehabilitation of existing property. An exempt seller is outside this Act. That does not tell us anything about other laws, which the next section takes up.

Other Rules That Do Not Disappear

The Disclosure Act is not the only law in play, and it says so itself. Section 45 states that the Act is not intended to limit remedies or modify any obligation to disclose created by any other statute or that may exist in common law in order to avoid fraud, misrepresentation or deceit in the transaction. That one sentence keeps the door open to other claims. It does not define them, and we will not guess at how they apply to a given sale.

One other statute is worth naming because its text is short and direct. The Illinois Consumer Fraud and Deceptive Business Practices Act, at 815 ILCS 505/2, declares unlawful the use of any deception, fraud, false pretense, false promise or misrepresentation, or the concealment, suppression or omission of any material fact, with intent that others rely on it, in the conduct of any trade or commerce. Whether a particular home sale falls within that language is a legal question we do not answer. We point to it only because Section 45 of the Disclosure Act preserves remedies under other statutes, and a reader should know such statutes exist. Section 10a of the same Act lets a person who suffers actual damage as a result of a violation bring an action, and says the court may award reasonable attorney's fees and costs to the prevailing party. It also sets a three-year limit on actions for damages under that section.

Time limits differ from law to law, which is exactly why a claim should not sit. Under 735 ILCS 5/13-205, civil actions not otherwise provided for, including actions to recover damages for an injury done to property, must be commenced within five years after the cause of action accrued. Under 735 ILCS 5/13-215, if a person liable to an action fraudulently conceals the cause of the action from the knowledge of the person entitled to it, the action may be commenced within five years after the person entitled discovers the cause of action. Compare those with the one-year clock in Section 60 of the Disclosure Act, and the difference is plain. We are listing the numbers so you can see them on the page. Which one fits a given problem is a question for an attorney.

Real estate licensees have their own rule. Section 15-25 of the Real Estate License Act of 2000, 225 ILCS 454/15-25, says licensees shall treat all customers honestly and shall not negligently or knowingly give them false information. It adds that a licensee engaged by a seller client shall timely disclose to customers who are prospective buyers all latent material adverse facts pertaining to the physical condition of the property that are actually known by the licensee and that could not be discovered by a reasonably diligent inspection of the property by the customer. The section also says a licensee is not liable to a customer for providing false information if the licensee's client provided it and the licensee did not have actual knowledge that it was false. So a seller's agent has a duty of its own, defined by "actually known" and "could not be discovered by a reasonably diligent inspection." The duty, as worded, reaches facts that could not be discovered by a reasonably diligent inspection by the customer.

Two disclosure rules operate on separate tracks from the Illinois report. The first is radon. Section 10 of the Illinois Radon Awareness Act, 420 ILCS 46/10, requires the seller of residential real property to provide the buyer with the IEMA pamphlet "Radon Testing Guidelines for Real Estate Transactions" and the Illinois Disclosure of Information on Radon Hazards, before the buyer is obligated under any contract. It says nothing in the section implies an obligation on the seller to conduct testing or mitigation. Section 20 of that Act lists exclusions, and its list of excluded transfers tracks the court-order, foreclosure, fiduciary and family transfers we described above. The second is lead. The federal Lead-Based Paint Disclosure Rule, as described by the Environmental Protection Agency, applies to most pre-1978 private housing, and it The EPA says the rule does not apply to foreclosure sales or to housing built after 1977. For radon in more depth, see our guide to Radon Testing in Rockford Homes: What Buyers Need.

What follows for a buyer who sees "as is"? The statutes cited here point to a practical order of operations, and each step is tied to a rule above. Ask for the seller's report before you sign a contract, because Section 20 requires delivery before signing. Read the "yes" answers and the explanations, because the form requires them. Remember that the form itself says the seller's lack of awareness is no guarantee a condition does not exist, and that you may request an inspection by a qualified professional. Our guide to Rockford Home Inspections: What the Inspector Checks covers what an inspection involves. Check the contract for any repair terms, because Section 40 leaves contract remedies in place. And ask a real estate attorney which deadlines apply, because they differ from one to five years depending on the claim.

For a seller, the same text reads the other way. The report is required in the sales the Act covers, the seller discloses what the seller actually knows, the seller supplements it if something new comes to light before closing, and a knowingly false answer carries liability for actual damages and court costs. Sellers with questions about a specific item should ask an attorney before signing, which is the advice printed on the form.

Bottom Line

"As is" tells you how repairs will be handled. It does not tell you what the seller knew. Under the Illinois Residential Real Property Disclosure Act, a covered seller must deliver a completed report before a contract is signed, must disclose material defects of which the seller has actual knowledge, and must supplement the report in writing if new information surfaces before closing. The form says the parties may agree to an "as is" sale, and it says the report is not a substitute for inspections. Both statements are in the statute.

The form tells buyers they may request an inspection by a qualified professional, and it tells sellers that completing the report creates legal obligations. Either way, the exemptions in Section 15, the one-year clock in Section 60 and the other laws preserved by Section 45 mean the facts of each sale decide what applies, so a real estate attorney is the right person to ask. If you are ready to look at homes for sale in Rockford, our other guides cover the surrounding steps, and the full list is in Illinois Real Estate Guide: Every Gambino Realtors Article.

That is a lot of statute in one sitting. These are the questions that usually come next when someone reads an "as is" listing for the first time.

Frequently Asked Questions