The exemption is narrow in a way that matters to you. In many states a fiduciary selling estate property is excused from completing the standard seller disclosure form, and the states differ on both the scope and whether it exists at all, so confirm the specific statute in your state with an attorney there. What the exemption generally does not do is authorize concealment or misrepresentation. If the representative had actual knowledge of a material defect and papered over it, a form exemption is thin cover. Whether your state imposes a duty to disclose known material defects independent of the form is exactly the kind of question that turns on how the statute is read, which is a lawyer's call.
It does not travel with the property. Your client is an ordinary seller on resale, not a fiduciary, and he now has actual knowledge of water staining and a crack behind removed paneling. He'll be filling out the form, and "I bought it from an estate as-is" is not a line on it.
On leasing, disclosure obligations to tenants are a different body of law from sale disclosure, and habitability duties don't wait for anyone to fill out a form. wren is right on the lead paint piece for a 1962 house. Water staining plus a crack means you're guessing about two things people sue over, so get an actual determination rather than a judgment call from the turnover crew.
The upstream point for future buys: an exempt seller means you're buying blind, and the correct response is money spent on inspection rather than reliance on paperwork nobody had to complete. Estates typically have no ownership history to draw on, since the representative may have visited the house twice in her adult life.
