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WHAT MUST A HOMEOWNER
DISCLOSE TO A BUYER?

Heritage Law Group Jan. 23, 2022

When you decide to put your home up for sale in California, your realtor should advise you of certain disclosures about the property that you must make to any potential buyer. The federal government only mandates that you disclose the presence of any lead paint; the rest is left to the states to decide.

The Golden State has mandated the use of two disclosure forms: the Transfer Disclosure Statement (TDS) and the Natural Hazard Disclosure Statement. The two forms, which rely a lot on checkboxes, cover everything from structural defects to natural threats present in fire, flooding, or earthquake zones.

If you’re a buyer searching for a home, you should not only be given these forms in a timely manner (the law states that you should receive them "as soon as practicable before transfer of title"), but you should also follow up by ordering a professional home inspection to verify the accuracy of the disclosures.

If you’re in the process of purchasing a home anywhere in California and you have questions about the disclosure process and your rights as a buyer, or if you’ve run into a disclosure dispute because the seller has not been totally forthright, contact The Heritage Law Group for legal counsel.

We have more than 35 years of experience in real estate law, and with offices in both San Jose and Aliso Viejo, we proudly serve clients throughout Northern and Southern California.

Disclosure Requirements in California

The Transfer Disclosure Statement is a standardized form that relies on a multitude of checkboxes for a home seller to list any property defects or potential problem areas for a buyer.

For instance, there is a section listing appliances and other features available in the home: refrigerator, central heating or air conditioning, septic tank, water softener, patio or deck, pool, and much more. The seller only needs to put a check next to anything on the list that is part of the home as currently configured.

Another section asks the seller to place a checkmark indicating “any significant defects/conditions” in structural and other essential components, such as the roof, floors, walls, driveways, walls/fences, electrical system, sewage, and more.

Another yes/no section requires the seller to reveal any environmental hazards, easements or encroachments, room additions, major prior damage to the property, lawsuits, and whether there is a homeowners association (HOA), among other disclosures. The seller must also reveal if any death has occurred in the residence in the prior three years.

The Natural Hazard Disclosure Statement requires the seller to reveal if the property is situated in a designated flood, fire, or earthquake hazard zone. In addition to this state-mandated form, some localities may impose additional disclosure requirements.

By law, the buyer has three days after receiving these disclosure statements to rescind their offer.

Additional Disclosure Requirements

Through the years, California has also passed laws requiring additional disclosures, including:

  • Mello-Roos Bonds and Taxes: The Mello-Roos Community Facilities Act of 1982 authorized the creation of community facilities districts that can issue bonds and levy special taxes to support the construction and maintenance of community facilities. These taxes must be revealed.

  • Property Taxes: The seller also must issue a standardized disclosure that warns of the possible issuance of one or two supplemental tax bills after the county assessor reappraises the property upon closure of the sale. The tax bills will have to be paid directly by the purchaser.

  • Smoke Detectors: The seller must provide a Smoke Detector Statement of Compliance. The requirements for smoke detectors may vary from county to county, but at the very minimum, there must be a smoke detector installed in a centralized area outside each sleeping location.

  • Lead-Based Paint Hazards: By federal law, a seller of any structure built before 1978 (when lead paint was banned) must disclose any prior use of lead-based paint or existing lead-based paint hazards on the property.

  • Water Heater Security: The seller of any real property containing a water heater must certify in writing to a prospective buyer that the water heater has been braced, anchored, or strapped to resist falling or horizontal movement due to earthquake motion.

How an Experienced Attorney Can Help

The list of disclosure requirements above applies statewide, but localities may also mandate other disclosures regarding the neighborhood in which the property is located and other issues. Additional disclosure mandates may apply depending on factors or circumstances affecting the individual property, such as the existence of window security bars.

If you’re selling or buying a home in California, you certainly want to know your rights and responsibilities when it comes to disclosures. Feel free to contact us at The Heritage Law Group with all your questions and concerns. We have more than 35 years of experience in all matters of real estate, and we serve clients throughout Northern and Southern California.