In California, real estate sellers face specific, legally mandated disclosure obligations when selling residential properties containing one to four units. These requirements are designed to inform prospective buyers of any known material facts that could affect a property’s value or desirability, ultimately fostering transparency and protecting both parties in the transaction. Key disclosures include the Transfer Disclosure Statement (TDS), which addresses the property’s condition, as well as the Natural Hazard Disclosure Statement (NHD), which covers risks such as earthquakes, wildfires, and floods. By providing accurate and thorough information, sellers help buyers make well-informed decisions, reduce the likelihood of disputes, and maintain the integrity of the real estate process.

Disclosures when you sell your property

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In California, real estate sellers have specific disclosure obligations when selling residential properties containing one to four units. These requirements are designed to ensure that potential buyers are fully informed about the property’s condition and any known defects. Here are the key points regarding real estate disclosures in California:

Disclosures Requirements

  1. Transfer Disclosure Statement (TDS):
    • Sellers must complete a Transfer Disclosure Statement, which covers various aspects of the property, including its condition, any known defects, and details about appliances included in the sale. This form is mandated by California Civil Code § 1102 and must be provided to prospective buyers as soon as practicable before the transfer of title [1].
  2. Natural Hazard Disclosure Statement:
    • In addition to the TDS, sellers are required to complete a Natural Hazard Disclosure Report, which informs buyers if the property is located in areas prone to natural hazards such as floods, earthquakes, or wildfires [1].
  3. Material Defects:
    • Sellers are obligated to disclose any known material defects that could affect the property’s value or desirability. This includes issues like structural problems, plumbing issues, or any other significant defects [3].
  4. Death on the Property:
    • Sellers must disclose if a death occurred on the property within the last three years. If a buyer inquires about any deaths, the seller must provide truthful information, regardless of when the death occurred [3].
  5. Compliance with Safety Regulations:
    • Sellers must certify compliance with various safety regulations, such as ensuring that smoke detectors are installed and that water heaters are properly secured to prevent tipping during earthquakes [3].
  6. Agent Visual Inspection Disclosure:
    • Real estate agents are required to conduct a visual inspection of the property and disclose any material facts affecting its value or desirability. This includes defects that may not be visible to the seller [1].

Timing and Delivery of Disclosures

  • Disclosures must be provided to buyers before the purchase agreement is signed. If disclosures are not delivered by this time, the buyer has the right to terminate the agreement [1].
  • Sellers often prepare disclosures ahead of listing their property to streamline the process and reduce the likelihood of buyers backing out due to unexpected issues revealed in the disclosures [1].

Legal Implications

Failure to disclose known defects can lead to legal consequences for sellers, including potential lawsuits for breach of contract or fraud. Therefore, sellers must be thorough and honest in their disclosures to avoid future disputes [3].

By understanding and adhering to these disclosure requirements, sellers can facilitate a smoother transaction process and foster trust with potential buyers.

Learn more:

  1. Selling a California Home: What Are My Disclosure Obligations?
  2. Disclosure Charts
  3. Selling A House In California: What To Disclose | Schorr Law, APC