Illinois Compiled Statutes
765 ILCS 77/40 (2026)
Material defect
✓ current as of May 2026
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(765 ILCS 77/40)
Sec. 40. Material defect. (a) If a seller discloses a material defect in the Residential Real Property Disclosure Report, including a response to any statement that is answered "yes" except numbers 1 and 2, and, in violation of Section 20, it is delivered to the prospective buyer after all parties have signed a contract, the prospective buyer, within 5 business days after receipt of that report, may terminate the contract or other agreement with the return of all earnest money deposits or down payments paid by the prospective buyer in the transaction without any liability to or recourse by the seller. (b) If a seller discloses a material defect in a supplement to this
disclosure report, the prospective buyer shall not have a right to terminate
unless: (i) the material defect results from an error, inaccuracy, or omission of
which the seller had actual knowledge at the time the prior
disclosure was completed and signed by the seller; (ii) the material defect is not repairable prior to closing; or (iii) the material defect is repairable prior to closing, but within 5 business days after the delivery of the supplemental disclosure, the seller declines, or otherwise fails to agree in writing, to repair the material defect. (c) The right to
terminate the contract, however, shall no longer
exist after the conveyance of the residential real property. For purposes of
this Act the termination shall be deemed to be made when written notice of
termination is delivered to at least one of the sellers by any method set forth in Section 50, at the contact information provided by any seller or indicated in the contract or other agreement. Nothing in subsection (a) or (b) shall limit the remedies available under the contract or Section 55.
(Source: P.A. 102-765, eff. 5-13-22.)
Notes of Decisions
Cited in 7
cases (1 in the last 5 years), 2000–2023 · leading case: Provenzale v. Forister, 743 N.E.2d 676 (Ill. App. Ct. 2001).
Provenzale v. Forister, 743 N.E.2d 676 (Ill. App. Ct. 2001). “765 ILCS 77/40 (West 1996). When a seller discloses false information in the disclosure report, as is alleged here, ordinarily the buyer discovers the material defect after the property is conveyed.”
Miller v. Bizzell, 726 N.E.2d 175 (Ill. App. Ct. 2000). “For example, the beginning of section 55 specifies, “If the seller ***” (765 ILCS 77/55 (ILCS 1998)); section 25 addresses the “liability of seller” (765 ILCS 77/25 (West 1998)); and section 40 does not allow the “prospective buyer” the right to terminate the contract under…”
Muir v. Merano, 882 N.E.2d 715 (Ill. App. Ct. 2008). “765 ILCS 77/40 (West 2006). Finally, section 55 of the Act provides that if the seller fails or refuses to provide the disclosure document prior to the conveyance of the property, the buyer shall have the right to terminate the contract.”
Hahn v. McElroy, 2023 IL App (2d) 220403 (Ill. App. Ct. 2023). “765 ILCS 77/40, 55 (West 2018). This strongly suggests that plaintiff’s claims concern the contract, given that they are based on the failure to disclose information as required by the Disclosure Act and that a remedy available to him, albeit for a limited time, was terminating…”
Provenzale v. Forister (Ill. App. Ct. 2001). “765 ILCS 77/40 (West 1996). When a seller discloses false information in the disclosure report, as is alleged here, ordinarily the buyer discovers the material defect after the property is conveyed.”
Muir v. Merano (Ill. App. Ct. 2008). “765 ILCS 77/40 (West 2006). Finally, section 55 of the Act provides that if the seller fails or refuses to provide the disclosure document prior to the conveyance of the property, the buyer shall have the right to terminate the contract.”
Miller v. Bizzell (Ill. App. Ct. 2000). “For example, the beginning of section 55 specifies, "If the seller ***" (765 ILCS 77/55 (ILCS 1998)); section 25 addresses the "liability of seller" (765 ILCS 77/25 (West 1998)); and section 40 does not allow the "prospec tive buyer" the right to terminate the contract under…”
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