Can a Buyer Sue a Seller After Closing in Illinois? What the Disclosure Act Requires

You sold your house. The closing went smoothly. The buyers signed everything, the title company wired the funds, and you moved on. Maybe you relocated out of state. Maybe you bought a new place across town. Either way, the sale is done.

Then you get a letter from a lawyer.

The buyers found a crack in the foundation. Or water in the basement. Or mold behind the drywall. And now they want you to pay for it, tens of thousands of dollars in repairs for problems they say you knew about and did not disclose.

This scenario plays out more often than most sellers expect. And for buyers, discovering a serious defect weeks or months after closing raises an obvious question: can you actually do anything about it, or did you assume all the risk when you signed at closing? In Illinois, the short answer is yes, but only in limited circumstances and only if certain conditions are met under state law.

The answer depends on what the seller knew, what they disclosed, and what Illinois law requires.

What the Illinois Residential Real Property Disclosure Act Requires

Illinois has a specific statute that governs what sellers must tell buyers before a residential real estate transaction closes. It is called the Illinois Residential Real Property Disclosure Act (765 ILCS 77), and it applies to most sales of residential property in the state.

Under the Act, sellers must complete a disclosure report, a standardized form that covers the condition of major systems and structural components of the property. The report asks sellers to identify known problems with the foundation, basement, roof, plumbing, electrical system, HVAC, water intrusion, drainage, environmental hazards such as lead paint or radon, and other material conditions.

The key word is "known." The Act does not require sellers to hire an inspector, conduct testing, or investigate conditions they are not aware of. It requires sellers to disclose defects they actually know about or have notice of at the time of the sale.

The disclosure report is typically signed during the contract period and delivered to the buyer before closing. If you bought a home in Illinois, you likely signed this form, and it may be more important than you realized at the time.

What Sellers Must Disclose

The disclosure obligation covers material defects that the seller is aware of. This means conditions that affect the value, habitability, or structural integrity of the property and that would not be obvious to a buyer through a reasonable inspection.

Common examples of conditions that must be disclosed:

• Known foundation cracks or structural movement
• History of water intrusion or chronic basement flooding
• Roof leaks or damage
• Mold or environmental contamination the seller is aware of
• Failing HVAC or plumbing systems
• Drainage problems on the property
• Code violations affecting habitability
• Lead paint or radon hazards

Disclosure also extends to conditions the seller has personally experienced or has been told about, including issues flagged by contractors, inspectors, or previous buyers who walked away from an earlier deal.

What Sellers Do Not Have to Disclose

The Act has important limits. Sellers are not required to disclose conditions they do not know about. There is no duty to investigate, inspect, or test the property before completing the disclosure form. If a seller has never experienced water in the basement and has no reason to suspect a problem, there is no obligation to disclose a hidden issue, even if one exists.

Sellers also do not have to disclose defects that are open and obvious. These are called patent defects, meaning visible issues that a reasonable buyer would notice during a walkthrough. The Act is primarily concerned with latent defects, which are hidden problems that a buyer would not discover through ordinary observation.

Certain transactions are exempt from the disclosure requirement entirely:

• Transfers during bankruptcy, foreclosure, or divorce proceedings
• Transfers by a fiduciary such as a trustee or executor
• Transfers between family members

What Buyers Need to Prove to Sue After Closing

If a buyer discovers a defect after closing and wants to bring a claim against the seller, they generally need to establish three things:

The seller knew about the defect at the time of the sale. Actual knowledge is difficult to prove. It means the seller was personally aware of the condition, not just that they should have known. Evidence might include prior repair invoices, contractor reports, insurance claims, emails, text messages, or testimony showing the seller experienced or was told about the problem.

In our experience, the strongest disclosure cases are built on paper trails. A single repair invoice or insurance claim showing the seller dealt with the same problem before the sale can be decisive.

The seller failed to disclose the defect on the disclosure report. For example, if the seller checked "no" next to foundation problems despite having addressed cracking issues before, that is a failure to disclose.

The buyer suffered actual damages. This typically means the cost to repair the defect. In some cases, it may involve the difference between what the buyer paid and the property's value if the defect had been known.

In addition, timing matters. Claims under the Illinois Residential Real Property Disclosure Act must generally be filed within one year from the earliest of possession, occupancy, or recording of the deed. However, the Act does not limit or modify obligations that exist under common law to avoid fraud, misrepresentation, or deceit. If a seller actively concealed a defect or made affirmative misrepresentations, a buyer may have claims for fraud that carry longer limitations periods. Waiting too long can bar an otherwise valid claim either way.

Does an "As-Is" Clause Protect the Seller?

Many residential purchase contracts in Illinois include an "as-is" provision stating that the buyer is purchasing the property in its current condition and that the seller makes no warranties about the property's condition.

An as-is clause provides some protection, but it does not override the disclosure requirements under the Act. Even if the contract says as-is, the seller still has a duty to disclose known material defects on the disclosure form.

However, as-is language can make it harder for buyers to bring claims for defects that were discoverable through a reasonable inspection. If the buyer chose not to get an inspection, or got one and missed something, as-is language strengthens the seller's argument that the buyer accepted the property in its visible condition.

The Role of the Buyer's Inspection

Most residential buyers in Illinois hire a home inspector before closing. The inspection report often identifies defects, and the buyer must then decide whether to proceed, negotiate repairs, or terminate the contract.

If the buyer's inspector flagged a problem and the buyer closed anyway, it becomes much harder to argue that the seller is responsible. The buyer had notice of the condition and chose to move forward.

But inspections have limits. Inspectors do not open walls, dig up sewer lines, or test for every possible issue. Latent defects, meaning hidden problems behind finished surfaces, underground, or outside the inspection scope, may not show up until months after closing. These are the types of defects most likely to support a post-closing disclosure claim.

Common Post-Closing Disputes in Illinois

The defects that generate the most post-closing litigation tend to be expensive to fix and difficult to detect before closing. Common examples include foundation and structural problems (especially in older homes), water intrusion and drainage failures that later cause mold or rot, and sewer and plumbing issues that were not visible during inspection. These cases often overlap with construction defect claims, especially when the defect traces back to original construction or a renovation.

Each of these can be a latent, material defect that may form the basis of a claim if the seller knew about it and failed to disclose it. It is also worth noting that most homeowner's insurance policies do not cover undisclosed pre-existing defects, so buyers should not assume insurance will absorb these costs.

Practical Advice for Sellers

The best protection for sellers is honest and thorough disclosure. Complete the disclosure form carefully and err on the side of over-disclosing. If you had a water issue five years ago and it was repaired, disclose it. If your HVAC system is aging and has needed frequent repairs, mention it.

Keep records of all maintenance, repairs, and improvements. If a buyer later asserts a claim, your documentation showing that you addressed the issue and disclosed it can be your strongest defense.

Do not attempt to conceal problems with cosmetic fixes. Fresh paint over water stains, new carpet over cracked tiles, or landscaping that hides drainage issues can later be characterized as concealment and may escalate a dispute into a fraud allegation.

Practical Advice for Buyers

Before closing, read the disclosure report carefully. If something looks vague or incomplete, ask follow-up questions in writing. Obtain a thorough home inspection and consider specialized inspections such as a sewer scope, radon test, mold assessment, or structural engineer evaluation when appropriate.

After closing, if you discover a defect that you believe was concealed, document everything immediately. Take photographs. Obtain repair estimates. Preserve emails and text messages. Timing is critical, both for building your case and because Illinois law limits how long you have to bring a claim. In many cases, the first step is a written demand outlining the defect and requesting compensation before litigation begins.

Not every post-closing defect means the seller did something wrong. Some problems develop after the sale. Some were genuinely unknown. But if the evidence suggests the seller knew about a material defect and failed to disclose it, Illinois law provides a path to pursue recovery. In cases where the purchase agreement itself was violated, buyers may also have a breach of contract claim alongside or instead of a disclosure claim. And when the dispute involves affirmative misrepresentations or concealment rather than a simple omission on the form, the case may fall under misrepresentation and disclosure dispute theories that carry different remedies and longer deadlines.

Post-closing disputes are one of the most common forms of real estate litigation we handle. Whether you are a buyer building a case or a seller responding to a demand letter, the strength of the claim almost always comes down to what can be documented.