Property Condition Duties

Module 1: Property Condition and the Broker's Role

Property condition information may reach you through a seller's disclosure form, an inspection report, or a passing comment at a showing. This module sets out the legal framework for handling those facts, covering concerns that range from oil tanks to wildfire.

Oregon's real estate license law gives seller's and buyer's agents three legal duties for handling property condition information:

• Disclose known material facts. You must tell every party about material facts you know if they are not apparent or readily ascertainable. A fact is readily ascertainable when a party could easily find it through an ordinary look at the property or a routine check of available records. This duty applies to all parties, not just your client.
• No implied duty to investigate matters beyond your level of expertise. The agency laws do not imply a duty to investigate matters outside your expertise, such as the property's condition. If you agree in writing to investigate, treat that agreement as a serious commitment.
• Refer matters you cannot evaluate. You must advise your client to seek expert advice on issues beyond your expertise. This duty is affirmative and cannot be waived.

Applying Duties and Their Limits

The investigation limit doesn't excuse you from responding to warning signs. A water stain, news that a septic test failed, or two sources reporting different square footage give you information to act on. Ask: Is the fact material? Could the other party readily see or find it? If it's material and the other party can't readily see or find it, disclose it. If assessing it requires expertise you lack, advise your client to consult an expert. Unless you agree in writing to investigate, you aren't required to diagnose the cause. Keep a dated transaction-file record of what you observed, disclosed, and recommended.

Why the Line Matters

Brokers get into trouble at both edges. Some fail to disclose a known defect. Others overstate, presenting a technical conclusion as fact: "The roof has years left" or "That crack is just settling." Oregon law allows discipline for a material misrepresentation that creates a reasonable probability of harm, or for conduct below the standard of care. A confident opinion outside your expertise can become a material misrepresentation.

The seller has separate duties. Oregon's seller property disclosure law places responsibility for condition statements on the seller, not you. But what you know remains your responsibility, whatever the seller's form says.

Inspectors and Module Scope

The Inspector's Role

The person who checks a property's condition for the buyer is usually a home inspector. In Oregon, anyone paid to perform home inspections generally must hold Construction Contractors Board certification and own or work for a board-licensed business. Limited statutory exceptions apply. Helping clients choose a qualified inspector and knowing what a report covers and leaves out are part of your referral duty.

What This Module Covers

In 1.1, you'll distinguish facts you must disclose from issues you don't have to investigate. Section 1.2 treats seller disclosure questions about condition as a risk map. Section 1.3 explains who may inspect in Oregon and what inspection reports cover. Section 1.4 looks at referrals, preferred vendor lists, and pre-listing inspections.

We begin with the disclosure duty and where your knowledge ends and an expert's work begins.

Known Material Facts

What You Must Disclose and What You Need Not Investigate

The three-part framework begins with know, the word that triggers your disclosure duty.

What Counts as a Known Material Fact

Your duty depends on three questions:

1. Do you actually know it? You may know it from a seller's comment, an earlier inspection report in the file, a neighbor's complaint you heard firsthand, or a stain you saw yourself. You can know the basement flooded twice without knowing the cause.
2. Is it material? A fact is material if it would matter to a reasonable party's decision to buy, sell, or set a price. Recurring water intrusion is material; a scuffed baseboard is not.
3. Is it hidden from the other party? You need not point out facts that are apparent or readily ascertainable. A sagging gutter in plain view is apparent; water that appears only in March is not.

Oregon law implies no duty to investigate matters outside your expertise unless you agree in writing. If all three answers are yes, disclose the fact to the other party and your client. In Oregon, this affirmative duty can't be waived. A client's request for silence doesn't change it.

Example: A Portland seller says the basement takes on water every heavy winter, then marks "No" on the water question of the seller's disclosure form. The form is the seller's statement; the seller's comment is your knowledge. Giving it to the other party doesn't meet your separate disclosure duty.

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You must disclose a fact you know that is material and not apparent to the other party. Recurring water intrusion is material, the seller's comment gives you knowledge, and in Oregon this duty cannot be waived. A client's request for silence does not change it, and you need not know the cause to know the fact.

Limits on Investigation

Oregon law does not imply that you must investigate matters outside your expertise. Examples include the property's condition, the legal status of title, and whether the owner followed the law in the past. You are not expected to:

• Crawl into an attic to look for rot or estimate how long the roof will last.
• Search title records for unrecorded easements, which are rights others have to use the land but that do not appear in public records, or for a cloud on title, a claim or defect that raises doubt about ownership.
• Check whether an earlier remodel had a permit.

This limit has two parts. First, it covers only matters outside your expertise. Work within ordinary brokerage skills still calls for reasonable care and diligence. For example, read the listing information you publish and review documents in your file.

Second, if you or your agent agree in writing to investigate something, you take on that duty for the specific matter covered by the agreement. Read your listing agreement and buyer representation agreement for promises to check permits, take measurements, or review the property's condition. Coordinating a specialist is not the same as agreeing to do the specialist's work yourself. Keep that distinction clear in the documents you sign.

Refer Questions Beyond Expertise

When to Recommend Expert Advice

When a question exceeds your expertise, refer the client to an expert rather than answer it. In Oregon, seller's agents must advise their sellers, and buyer's agents their buyers, to seek expert advice on matters beyond the agent's expertise.

Separate what you observe from what you can determine. For example, you might say: "I saw a horizontal crack in the north foundation wall. I can't tell you whether it's structural. I recommend you have a qualified inspector or engineer evaluate it before your inspection period ends."

This statement reports the crack, states your limit, and gives the client a next step. By contrast, saying, "That's just settling, every house this age has it," answers an engineering question outside your expertise. If the buyer relies on that statement, it may be a material misrepresentation.

The Parties Protect Themselves Too

Oregon law says your affirmative duties do not remove a buyer's or seller's responsibility to protect their own interests. Buyers still order inspections, read reports, and ask questions; sellers still complete the disclosure form honestly.

Shared responsibility doesn't reduce your duties. A buyer who skips an inspection does not excuse a broker who concealed a known leak. A broker's disclosure of the leak does not guarantee the plumber's estimate was correct. Explain shared responsibility early, preferably while reviewing the agency pamphlet, so clients do not mistake your role for a warranty.

Apply the Sorting Guide

When new information arrives, sort it:

• Disclose a known material fact that is not apparent or readily ascertainable.
• If you see a warning sign you cannot evaluate, disclose what you observed and advise the client to seek expert advice.
• If you agreed in writing to check something, do it carefully.
• If a condition is outside your expertise, you never learned about it, and neither you nor your agent agreed in writing to investigate it, these provisions impose no implied duty to investigate. Use reasonable care for matters within your expertise.

Then note the date, source, what you disclosed, and what you recommended.

Many of these facts first surface on the seller's disclosure form. In Section 1.2, we read the questions one by one as a map of where disclosure risk is greatest.

SPDS Purpose and Answer Signals

The SPDS Condition Questions as a Risk Map

In section 1.1, we saw that the seller's disclosure form can reveal facts the seller knows. The Seller's Property Disclosure Statement (SPDS) also helps you see where disclosure risk may be concentrated. Each section points to a system or condition that commonly leads to disputes after closing.

In Oregon, the seller completes and signs the form, then delivers it to each buyer who makes a written offer on covered residential property. The form says the disclosures are based on the seller's actual knowledge at the time of disclosure and is marked "NOT A WARRANTY." It advises buyers to hire qualified specialists, such as engineers, plumbers, roofers, and environmental inspectors. The form opens an inquiry; it does not end one.

The SPDS asks for "Yes," "No," or "Unknown" answers, and its instructions tell the seller not to leave any spaces blank. Read each answer as a signal.

A "Yes" is a branch point. It may flag a permit, a shared agreement, or a past repair. Ask for an explanation and the paperwork.

A "No" is not clearance. It reflects only what the seller knows and does not confirm the system's condition.

Uncertainty, Conflicts, and Conditions

"Unknown" signals uncertainty, not that a problem is absent. Look more closely when other facts suggest the seller knows the answer. For example, if the seller told you the furnace was replaced last year after a failed safety inspection, an "Unknown" answer about that defect conflicts with what the seller has shown they know.

A conflict calls for escalation. If an answer contradicts what you saw or heard, check it against your disclosure duty from Section 1.1, which covers material facts you know that are not apparent or readily ascertainable to a party.

The Condition Sections, Section by Section

Water. These questions cover the water source, permits, shared wells or springs, access rights, and supply problems. Keep two questions separate: Is the water safe and sufficient? Does the buyer have a legal right to use it? A plumber or water tester can address the first. A title officer or attorney can address the second. Module 3 covers well testing in detail.

Sewage. The form asks whether the property connects to public sewer or uses an onsite septic system. It also asks about permits, alterations, evaluations, and pumping history. Compare the answers with available county records. A sewer scope or septic evaluation is often the next step.

Structure, Moisture, and Other Conditions

Dwelling structure. The seller addresses roof leaks, repairs, remodeling, and whether work was permitted. A completed repair may not mean the problem is fixed. Request invoices, permits, and warranties. Unpermitted electrical or plumbing work often lowers value because it creates a cost to cure: the expense of correcting the work or bringing it up to code.

Moisture. The structure section covers moisture problems, water penetration, mildew odors, and other moisture conditions. Standing water and drainage appear separately in the general section. Connect each symptom to the right expert. The source may be the roof, plumbing, drainage, or the foundation. Diagnosing the moisture source is not your job.

Seismic. The form asks whether a house built before 1974 has been bolted to its foundation. Seismic retrofitting commonly includes bolting the house to its foundation, though a full retrofit may involve other work. A checked box does not certify earthquake performance. Do not call a house "earthquake-safe."

General and environmental conditions. This section covers damage from fire, flood, and other hazards, plus environmental concerns, storage tanks, and drug manufacturing history. Each issue calls for a different specialist. Modules 4 and 5 address them individually.

Full disclosure. The form asks about any other material defects. No checklist can name every possible problem. If the seller knows of a material issue no earlier question covers, it belongs here.

Wildfire Disclosure and Basement Leakage

The wildfire question is gone

SB 83 (2025) repealed Oregon's statewide wildfire hazard map and removed the SPDS question asking whether a property was classified as wildland-urban interface. Current forms, including OREF 020 released in January 2026, no longer ask this question.

The change is narrow. Fire risk, insurance concerns, local requirements, and known fire damage still exist. The form still asks about material damage from fire and other material defects. If a buyer asks why the checkbox is gone, explain that the legislature removed a classification question. Don't imply that the risk itself is gone. Section 5.3 covers wildfire after SB 83.

Workplace example

A Salem seller answers "Yes" to a question about past basement leakage and writes, "Fixed 2023." Don't decide from this answer alone whether the house is defective. Ask for evidence that helps the buyer make an informed decision: Who did the repair? Is there an invoice? Has water returned? Record the answer, request the records, and recommend that the buyer have a qualified inspector assess the area.

Disclosure Deadlines and Inspections

After delivery, the buyer generally has five business days to revoke the offer by providing a separate signed written statement disapproving the seller's disclosure, unless the buyer waived this right. The form says "five days," but Oregon law sets the deadline in business days.

Track this deadline separately from the inspection contingency. The purchase agreement sets the inspection period and the time for buyer responses. SPDS answers are the seller's representations, not yours. You're responsible for what you know.

Many SPDS answers lead buyers to an inspector. Section 1.3 explains who may perform that work in Oregon and what an inspection report covers.

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After delivery, the buyer generally has five business days to revoke by giving a separate signed written statement disapproving the disclosure. The form says five days, but Oregon law counts business days, and this deadline is tracked separately from the contractual inspection period.