UPDATE: In December 2017, I was contacted by a representative of the Illinois REALTORS indicating that as a result of their recent form review, they have decided to remove the mold disclosure from circulation and asked that I remove the disclosure form that was below. I’ve complied with that request and redacted the document. There are a number of disclosures that are commonly provided to Buyers by Sellers in Illinois residential real estate transactions. It is not uncommon for a lead-based paint disclosure (for properties built before 1978), a radon hazard disclosure (for properties below the third story above ground level), or an Illinois Residential Real Property Disclosure to accompany a real estate contract. One document that is not required by Illinois law but that is sometimes included with a contract is a mold disclosure.
The lead-based paint disclosure is required by the federal Residential Lead-Based Paint Hazard Reduction Act of 1992. The radon hazard disclosure is required by the Illinois Radon Awareness Act. The residential real property disclosure is required by the Illinois Residential Real Property Disclosure Act. But, there is no law requiring a “Mold Disclosure”.
Many Buyers and Sellers are surprised to learn that Illinois has no law specifically dealing with the disclosure of mold. This is made a bit more surprising by the fact that some Realtor boards have created their own mold disclosure forms despite the fact that there is no law. Below is a redacted copy of the Illinois Association of Realtors old Mold Disclosure that is no longer in circulation.
In 2003, the Illinois legislature did pass House Joint Resolution 12 that establishes a “Joint task force on mold in indoor environments” and to study mold issues so that it can make a recommendation to the legislature about possible regulation of mold issues. The task force delivered its report to the general assembly in 2005.
In 2004, the Illinois legislature introduced the Toxic and Pathogenic Mold Protection Act. This law would have required specific mold disclosures, however, the bill was never passed.
As for the Illinois Residential Real Property Disclosure Act, that law does not specifically address mold. The word “mold” is not even mentioned once in the Act. However, there are parts of the disclosure that could be interpreted to require the disclosure of known mold. (The IRRPDA was interpreted a few years back to make broad the interpretation of windows and doors in the case Kalkman v. Nedved and in similar fashion, it can likely be argued that mold is a defect in the walls, foundation, roof, etc.). It is settled law in Illinois that a buyer has a duty to disclose known material defects in a property being sold. At common law, a buyer has a remedy known as fraudulent misrepresentation, so I am not saying that there is no obligation to disclose a known mold defect. It is clear that if a Seller is aware of mold, the Seller should disclose it.
So, where did the Mold Disclosure come from? Likely, it comes from the real estate agent’s not wanting to be blamed for mold issues. In the 2000s, mold was a “hot topic” and this provides a bit of extra protection. Sure, one could argue that this is “no harm no foul”. Why not be open about mold inspections and give a Buyer a little warning that says “be sure to pay attention to the hazard of mold when you inspect”? Well, we don’t disclose the status of prior roof inspections and then suggest to a Buyer “be sure to check that roof!”. The Seller does have an obligation to disclose known mold defects anyway, so the disclosure is superfluous. I guess that line of thinking is correct and I’m rarely an opponent of over-disclosure. I guess my biggest objection is that most Seller’s are not accurately informed that they do not have to fill out a mold disclosure when they are presented with it. They just assume it is a required disclosure – after all, it is printed on a real estate organization’s pre-printed form, right? This gives the Seller the sense that they MUST sign it and I think that’s wrong.