Disclosure Requirements for Selling California Real Estate

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Clever Real Estate

Updated 

April 21st, 2019

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If you’re thinking about selling a house in California, it may be time to learn about disclosure requirements in The Golden State. Here’s an insightful guide on what you will need to disclose, and what is not required of you.

If you are venturing to sell your house in California in the near future, you should ideally familiarize yourself with The Golden State’s Transfer Disclosure Statement (which is also referred to as TDS.)

Most states require you to make certain disclosures, which refers to any material defects in the home. In the state of California, you will be held liable if you do not tell the buyer about them upfront. To avoid getting in legal trouble, it is crucial that you know what you do and do not need to disclose when it comes time to fill out your own disclosure statement.

Why Does California Mandate a TDS

Potential home buyers need to know as much as possible about a property in order to evaluate whether they want to place an offer on a house and what resources they will need in order to make a purchase.

Disclosures are also important to home buyers because it helps them in offering an appropriate purchase price; knowing about any potential repairs or upgrades needed to areas of the home are key factors when coming up with these numbers; which can be explained thoroughly in a TDS.

The disclosure obligations also remind California homesellers that they have a legal responsibility to be open about a property’s condition. We’re not trying to scare you off here, but there is a potential chance that you could end up getting sued by the buyer if you fail to disclose your property’s problems or defects. Educating yourself on all the requirements, as well as consulting with a local trusted real estate agent are key components to avoiding legal action against you altogether.

When to Submit a TDS in California

Technically, there is no specific deadline by which you need to provide these disclosures to a prospective buyer. However, the intent of the law is to get them in the hands of the buyer in a timely fashion.

It is best to give the disclosures to the buyer as soon as you possibly can so that the buyer can make an informed decision on whether or not they are going to submit an offer for your home. It’s customary for some sellers to line up all disclosures, inspections, and other paperwork prior to listing their property; this ensures that everything is ready for serious offers to be accepted.

Sellers also commonly choose to make a copy of the disclosures available within a day or two of an open house.

Another route that sellers elect to take is to 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 to light anything unexpected.

Filling out the California Transfer Disclosure Statement

You should know that the seller disclosure requirements in the state of California are extremely 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 Transfer Disclosure Statement form can be obtained from your local California real estate agent.

The TDS form covers a broad range of topics, such as structural information about your home and whether any deaths occurred on the property in the last three years. Additionally, you will need to include information about all of your home appliances, including which are included in the sale, as well as whether or not they are operational.

If you have expanded your property at all by adding any additional rooms, had any damage to your home, or know of any neighborhood noise problems, you’ll want to include those factors in your report as well.

The California Natural Hazard Disclosure Statement

As a seller in California, you must also complete an additional disclosure form, the Natural Hazard Disclosure Report/Statement, prior to any home sale. This can be obtained either from your real estate agent or online here.

The California Natural Hazard Disclosure Statement poses a series of “yes/no” questions tackling things like whether your property is located in a special flood hazard area, in an area with a substantial forest fire risk, or in an earthquake fault zone. The local government of your city or county will be able to provide you with more information about these classifications, as can your local real estate agent.

What You Don’t Need to Disclose In California

Details that you do not need to disclose include whether a prior occupant had Acquired Immune Deficiency Syndrome (AIDS) or whether someone had died on the property more than three years before the current potential buyer’s purchase offer. However, if a potential buyer asks you a question about any deaths on your property, you will still need to truthfully answer, even if the answer involves an occurrence more than three years in the past.

Final Steps

It is important to keep in mind that the more you disclose, the better it is for both you and the buyer. Just because you disclose an issue doesn’t mean you are obligated to repair or correct it yourself; the buyer also has the option to correct a problem or to simply overlook it if the issue is a minor one that is not worth digging into.

As a matter of fact, disclosing more than you are necessarily required to can often help the deal go through. The buyer’s realtor, and therefore the buyer, will be thrilled to see that you have provided a fully completed TDS form. This will show them that you are thorough and are taking the home sale seriously.

You will find it immensely useful to seek advice from a local trusted real estate agent on what must and/or should be disclosed, and what isn’t required of you. Experienced agents have been through this process so many times that they know the requirements in their sleep.

Clever can help connect you with a California based real estate agent that knows their stuff and could lead you to a stress-free home sale experience.