What Does a Seller Have to Disclose When Selling a Home in Colorado?
Colorado sellers often ask what they are required to tell a buyer. The honest answer is that disclosure obligations come from several places at once: the common law, a group of Colorado statutes, federal lead-based paint rules, and the standard purchase contract. Each covers different ground, and none of them requires a seller to know everything about the property. What they share is a focus on what the seller actually knows.
This article walks through each source of disclosure obligations for residential sales and where sellers most often get into trouble.
The common-law duty to disclose known latent defects
Colorado has long recognized that a home seller must disclose known latent defects. A latent defect is one a buyer would not find through a reasonable inspection. In Cohen v. Vivian (1960), the Colorado Supreme Court held that a seller who knew a house was built on problem soil had a duty to disclose that defect to the buyer. The court held that the buyer's inspection clause did not shield the seller from that duty.
The Colorado Court of Appeals has since described this common-law duty as long recognized. In In re Estate of Gattis (2013), it held that the economic loss rule does not bar a buyer's nondisclosure claim against a home seller for known latent defects.
A nondisclosure claim is not automatic, however. Under Colorado's pattern jury instructions, a buyer generally must prove the seller had a duty to disclose a material fact and concealed it with the intent to create a false impression. The buyer must also prove that they justifiably relied on the absence of that information and were damaged as a result. The outcome of any real claim depends heavily on the facts, including what the seller knew and what the buyer could have discovered.
The Seller's Property Disclosure form
Most Colorado home sales use the Colorado Real Estate Commission's standard purchase contract. It requires the seller to deliver the Commission's current Seller's Property Disclosure form by the Seller's Property Disclosure Deadline. The form is completed to the seller's actual knowledge and must be current as of that deadline.
The form asks about the roof, structure, plumbing, electrical and mechanical systems, water, sewer or septic, environmental conditions, and many other topics. Two points are worth emphasizing:
It is based on actual knowledge. The seller is not expected to inspect the home or guess. Answering "no" to something the seller actually knows about is where liability risk begins.
It is not a substitute for inspection. Buyers should still inspect. The form reports what the seller knows, not the condition of the home.
The standard contract also requires the seller to disclose in writing any adverse material facts the seller actually knows about. That includes new adverse material facts the seller learns after the contract is signed. When the seller discloses a new adverse material fact, the buyer generally has a short window to terminate.
Disclosures required by Colorado statute
Several Colorado statutes require specific disclosures in residential sales. Many are built into the standard contract or the Seller's Property Disclosure form, so sellers using those forms will see them there.
Common interest communities (HOAs): a bold-faced statement in the contract that the property is in a common interest community, that the owner must pay assessments, and that unpaid assessments can lead to a lien and possible sale.
Source of potable water: disclosure of whether drinking water comes from a well, a water provider, or neither, with a copy of the well permit if available.
Oil, gas, and minerals: a statement that the surface and mineral estates may be owned separately and that third parties may have rights to use the surface.
Methamphetamine labs: written disclosure, at or before the sale, of whether the seller knows the property was used as a meth lab, unless it was remediated and certified under state standards.
Radon: disclosure of any radon testing and known results, and any mitigation, along with the state radon brochure. The seller is not required to test.
Special taxing districts: a statement that the property may be subject to special district taxes and debt.
The methamphetamine statute also gives buyers specific remedies against a seller who knew about meth production and failed to disclose it. Those remedies include remediation costs and certain health-related costs. The buyer must sue within three years after closing.
Federal lead-based paint disclosure
For most housing built before 1978, federal law requires the seller to give the buyer an EPA-approved lead hazard pamphlet. The seller must also disclose any known lead-based paint or lead-based paint hazards and provide available records and reports. Specific warning and disclosure language must be attached to the contract. The buyer generally gets a 10-day period to conduct a lead inspection or risk assessment, unless the parties agree in writing to a different period or the buyer waives it. Some exemptions apply, including foreclosure sales. The standard Colorado contract builds in a Lead-Based Paint Disclosure Deadline and a related termination deadline.
What a seller generally does not have to disclose
Colorado law treats certain facts that could "psychologically impact" or stigmatize a property as not material facts subject to a disclosure requirement. These include that the property was the site of a homicide, another felony, or a suicide, or that an occupant had HIV or AIDS. The statute also says no cause of action arises against a real estate broker for failing to disclose those circumstances.
Sellers also generally are not expected to disclose defects they do not know about. The common-law duty and the Seller's Property Disclosure are both tied to actual knowledge.
Where sellers get into trouble
Many disclosure disputes involve a problem the seller knew about but downplayed, left off the form, or fixed cosmetically without explaining. Common examples:
a prior basement leak that was patched and painted over;
known foundation movement or soil issues;
roof leaks or hail damage the seller didn't mention;
sewer line or septic problems;
unpermitted work; and
HOA disputes or planned special assessments the seller knew about.
Hypothetical example: A seller had water in the basement twice after heavy storms, regraded the yard, and repainted the walls. On the Seller's Property Disclosure, the seller checks "no" for past water intrusion because the problem "seems fixed." After closing, the buyer's basement floods. Because the seller knew about the prior leaks, the buyer may have a nondisclosure claim. Whether it succeeds would depend on what the form asked, what the buyer's inspection revealed, and whether the buyer can prove the other elements. Disclosing the history along with the repairs would likely have avoided the dispute.
Practical guidance
For sellers: Complete the Seller's Property Disclosure yourself, carefully, and based on what you actually know. When in doubt, disclose and explain: "Water in basement in 2022 after storm; regraded yard; no recurrence since." Keep repair records and give them to the buyer. Update your disclosures if you learn something new before closing.
For buyers: Read the disclosure closely. Treat anything vague as a reason to ask follow-up questions. Get a professional inspection regardless of what the form says, and consider specialized inspections, such as a sewer scope, radon test, or structural evaluation, when the property warrants them.
The bottom line
Colorado's disclosure rules are built around what the seller actually knows. Sellers who disclose known problems clearly, with context and documentation, are in a much stronger position if a dispute arises. Buyers are best protected by reading the disclosures and inspecting the property.
This article provides general information about Colorado law and is not legal advice. Reading it does not create an attorney-client relationship with Proper Tea Law. Laws and standard forms change, and disclosure obligations depend on the property, the transaction, and what the seller actually knows. For advice about your situation, consult an attorney licensed in Colorado.