3.2 Arizona Seller Property Disclosure Statement (SPDS)
Key Takeaways
- The SPDS is a 10-page document disclosing known property conditions and issues
- Sellers must provide the SPDS within specified timeframe (usually 3 days of acceptance)
- The SPDS covers structural, mechanical, environmental, and legal issues
- Sellers disclose what they KNOW—they are not required to investigate
- About 77% of real estate lawsuits involve disclosure issues, making accuracy critical
The Seller's Property Disclosure Statement (SPDS) is Arizona's primary disclosure document for residential transactions.
Overview
The SPDS is:
- A 10-page document developed by AAR
- Required in most residential transactions
- Due within specified days of contract acceptance
- A disclosure of known conditions
Important: Sellers disclose what they know. The SPDS is not a warranty and sellers are not required to investigate.
When SPDS is Required
The SPDS is typically required for:
- Residential resale transactions
- Properties with 1-4 dwelling units
- Sales where buyer is not receiving a public report
Exemptions
SPDS may not be required for:
- New construction with public report
- Court-ordered sales (foreclosure, probate)
- Transfers between family members (in some cases)
Delivery Timeline
| Timeframe | Requirement |
|---|---|
| Delivery deadline | Per contract (typically 3 days) |
| Buyer review period | As specified in contract |
| Updates required | If conditions change |
SPDS Categories
The SPDS covers multiple property aspects:
1. Property History
| Topic | Examples |
|---|---|
| Prior damage | Floods, fires, structural damage |
| Repairs | Major work done to property |
| Insurance claims | Claims filed in past 5 years |
| Previous uses | Commercial, agricultural |
2. Structural Components
| System | Disclosures |
|---|---|
| Roof | Age, leaks, repairs |
| Foundation | Cracks, settling, repairs |
| Walls | Damage, repairs |
| Windows/Doors | Condition, replacements |
3. Systems and Appliances
| Category | Items |
|---|---|
| HVAC | Age, condition, maintenance |
| Plumbing | Issues, repairs, type |
| Electrical | Panel, wiring, issues |
| Appliances | What's included, condition |
4. Environmental Issues
| Issue | Required Disclosure |
|---|---|
| Lead-based paint | Required for pre-1978 homes |
| Asbestos | Known presence |
| Radon | If testing done |
| Mold | Known presence |
| Soil contamination | If known |
5. Legal and Neighborhood
| Topic | Examples |
|---|---|
| HOA | Fees, rules, assessments |
| Zoning | Current zoning, violations |
| Easements | Known easements |
| Boundary issues | Disputes, encroachments |
| Noise | Airport, traffic, commercial |
What Sellers Must Disclose
Sellers must disclose:
- Known defects
- Material facts about the property
- Information that could affect value or desirability
- Issues discovered during ownership
What Sellers Don't Have to Disclose
Arizona law does NOT require disclosure of:
- Deaths on the property
- HIV/AIDS status of prior occupants
- Sex offender proximity
- Paranormal activity
- Personal reasons for selling
5-Year Insurance Claims History
The Arizona Residential Resale Purchase Contract requires:
| Requirement | Detail |
|---|---|
| Document | 5-year insurance claims history |
| Deadline | Within 5 days of acceptance |
| Coverage | For length of ownership if less than 5 years |
This helps buyers understand property history and potential issues.
SPDS Updates
Sellers must update the SPDS if:
- New defects are discovered
- Previous answers change
- Conditions materially change
Updates should be provided promptly in writing.
Legal Consequences of Non-Disclosure
Seller Liability
Sellers may face:
- Fraud claims
- Rescission of contract
- Damages for repair costs
- Legal fees and costs
Statistic to Remember
About 77% of real estate lawsuits are related to disclosure issues. Accurate SPDS completion is critical.
Best Practices
- Complete honestly - Answer all questions truthfully
- When in doubt, disclose - It's better to over-disclose
- Update promptly - Notify of any changes
- Keep copies - Retain signed SPDS for records
- Don't guess - If unknown, say so
What percentage of real estate lawsuits are related to disclosure issues?
Which of the following must a seller disclose on the Arizona SPDS?