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  • Writer's pictureSara Naheedy, Esq.

What Is A Seller Obligated To Disclose?

In California, like many other states, a residential real estate property seller must make certain disclosures. These disclosures are extremely important because a potential home buyer needs to know as much as possible about the property in order to evaluate whether they really want to buy it and the resources that are necessary in order to make the purchase. This information includes any potential repairs or upgrades that need to be made to the property.

The disclosure obligations also remind California home sellers that they  have a legal responsibility to be open and forthright about a property's condition and can be sued after the fact for hiding a problem or defect. As a general rule, in California, all sellers of residential real estate property containing one to four units must complete and provide written disclosures to the buyer. There are a few exceptions, such as properties that are transferred by court order or from one co-owner to another. But if you are offering your home to the public for sale, you can all but count on this requirement applying to you.

There is not a specific deadline by which you need to provide these disclosures to a prospective buyer, but the intent of the law is to get them to the buyer in a timely fashion. It’s best to give the disclosures to the buyer as soon as possible so the buyer can make an informed decision. Some sellers will line up all disclosures, inspections, and other paperwork prior to listing their property so that everything is ready for serious offers to be accepted. Other sellers will make a copy of the disclosures available within a day or two of an open house, or wait for buyers to put in an offer before providing the disclosures, with the option for the buyer to back out or renegotiate if the disclosures bring up anything unexpected. If you do not give the required disclosures to the buyer by the time the two of you have signed the purchase agreement, then the buyer has the option to cancel the contract.

California’s seller disclosure requirements are very strict and thorough. California law provides a standard format, identified in Civil Code Section 1102, which must be used by sellers in making these disclosures. The resulting form, called the “Transfer Disclosure Statement” (TDS), can be obtained from your California real estate agent. As a seller in California, you must also complete an additional disclosure form, the Natural Hazard Disclosure Report/Statement, prior to any home sale. The TDS form covers a broad range of topics, from structural information about your home such as a leaky roof to whether any deaths occurred on the property in the last three years. You will need to include information about all appliances in the home, including which are included in the sale as well as whether they are operational. You will also need to disclose any room additions, damage, or neighborhood noise problems. Additional disclosure statements, such as those pertaining to special study zones or purchase money liens might also be required, depending on the location and details of your real estate transaction. Finally, you must also let a buyer know that information regarding the location of registered sex offenders is available from local law enforcement agencies and can be found online.

What if you are not sure about whether you need to disclose a defect? As a general rule, the more you disclose, the better it is for both you and the buyer. Remember, just because you disclose an issue doesn’t mean you are obligated to repair or correct it. The buyer also has the option to correct a problem or to overlook it, if the issue is a minor one. In fact, disclosing more than you necessarily have to can help the deal go through. The buyer’s realtor, and therefore the buyer, will be happy to see that you have provided a fully completed TDS form because it shows that you are thorough and are taking the home sale seriously.

When in doubt about whether to disclose or not, it's best to ask a trusted real estate professional.


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