If a home is sold due to foreclosure, is the seller required to provide a property disclosure statement?

In a foreclosure situation, the seller, typically a lender or financial institution rather than an individual homeowner, is often not required to provide a property disclosure statement. This exemption arises because the seller in a foreclosure is generally not the original owner but the entity that took possession of the property after the previous owner defaulted on their mortgage.

Since the lender has not lived in the property or maintained it, they lack detailed knowledge of its condition, which is the basis for providing such disclosures. Thus, they are exempt from the typical requirement that sellers disclose known defects and conditions of a property, as mandated in many real estate transactions. This exemption facilitates a smoother transaction process by alleviating the pressure on the lender to uncover and communicate property issues they may not be aware of.