Connecticut Legislature mandates $500 credits for failure to disclose home condition reports

The Connecticut State Legislature convened on February 24, 2025, to introduce Senate Bill 9, a significant piece of legislation aimed at enhancing transparency in residential real estate transactions and rental agreements. The bill seeks to address critical issues related to property disclosures, particularly concerning residential condition reports and flood risks.

Senate Bill 9 mandates that, starting July 1, 2026, all agreements for purchasing residential real estate must include a provision requiring sellers to credit buyers $500 at closing if they fail to provide the necessary written residential condition reports or flood disclosure notices. This provision aims to incentivize sellers to comply with disclosure requirements, thereby protecting buyers from unforeseen defects in properties.

Additionally, the bill stipulates that sellers are still obligated to disclose any defects that significantly impair the property's value, health, safety, or useful life, even if they provide the credit. This dual requirement emphasizes the importance of transparency and accountability in real estate transactions.

Another key aspect of the bill is the introduction of a flood disclosure notice that landlords must provide to tenants for rental agreements executed or renewed after July 1, 2026. This notice, prescribed by the Commissioner of Consumer Protection, aims to inform tenants about potential flood risks associated with the property they are renting.

The bill has sparked notable discussions among legislators and stakeholders. Proponents argue that it will enhance consumer protection and promote informed decision-making among homebuyers and renters. However, some opposition has emerged, with concerns raised about the potential financial burden on sellers and landlords, particularly in a challenging housing market.

The implications of Senate Bill 9 extend beyond individual transactions. By mandating clearer disclosures, the bill could lead to a more informed real estate market, potentially reducing disputes and litigation related to undisclosed property defects. Experts suggest that this legislation may also encourage sellers to invest in property maintenance and improvements to avoid penalties associated with non-disclosure.

As the legislative process continues, the bill's future remains uncertain, with further debates expected in the coming weeks. If passed, Senate Bill 9 could significantly reshape the landscape of residential real estate transactions and rental agreements in Connecticut, fostering a culture of transparency and accountability.