Which statement about the Property Transfer Disclosure Statement is true?

• A. It is optional and rarely used
• B. It is used to disclose property condition and is typically required by law
• C. It is used only for rental properties
• D. It is only for new construction

Answer: (B)

Disclosing known property conditions to the buyer is a standard obligation in Colorado real estate transactions. The Property Transfer Disclosure Statement serves as the official tool for that disclosure, laying out known defects and issues that could affect the property's value or desirability.

Because state law generally requires this disclosure in most residential transfers, the statement that it is used to disclose property condition and is typically required by law is the best choice. It isn’t optional, nor is it limited only to rental properties or to new construction; it applies to typical home sales as part of ensuring buyers have honest, informed information about the property. This disclosure helps protect both parties by clarifying known problems and reducing disputes after the sale.