Every state has specific laws regarding the required disclosures when selling a home. California law requires homeowners to disclose any known material facts that may affect a buyer’s decision to purchase the home. California homeowners complete a Transfer Disclosure Statement, which outlines what is necessary to disclose when selling their home.
What Are Disclosures In Real Estate?
Real Estate Disclosures are material facts that a homeowner must make known to a potential home buyer. This includes anything that may affect the buyer’s decision to purchase the property.
This Article Will Explain:
* What is a Transfer Disclosure Statement (TDS)?
* What Exactly Must Be Disclosed On A California TDS?
* The 3 sections of the California Transfer Disclosure Statement:
* How Much Should a Seller Disclose?
* Agent Visual Inspection Disclosure (AVID) in California:
* Do I Need to Complete a TDS if My Property is Being Sold “As-Is”?
* Home Inspections and Disclosures:
What is a Transfer Disclosure Statement (TDS)?
In California, sellers are required to complete a Transfer Disclosure Statement (TDS). The TDS is a disclosure form that outlines the specific conditions of the property for sale. The seller will complete the form with the property-specific information, outlining the property’s features and conditions. The seller is only required to fill in the form according to their best knowledge. The seller does not have to conduct a thorough home inspection.
In a traditional sale, the California Association of Realtors (C.A.R.) requires a seller to deliver a transfer disclosure statement within seven days of offer acceptance.
What Exactly Must Be Disclosed On A California TDS?
So what does a seller have to disclose? In short, a seller must disclose only that which is known to them. Completing a disclosure statement in California does not require further investigation or inspection of the home for sale. A seller will only be liable for that which he was aware of and did not disclose to a buyer. The language on the disclosure form reads: “Are there, to the best of your (Seller’s) knowledge…”
California law outlines the specific features of a home that must be disclosed:
There are 3 sections of the California Transfer Disclosure Statement:
- Property Characteristics: Seller will list all appliances included with the sale of the home and any known defects within them.
- Malfunctions and Defects: Seller lists any known structural defects in the property
- Special questions: A list of 16 “yes” or “no: questions regarding specific features of the home that are required by law to be disclosed. If the seller answers “yes” to any of these conditions, it is required that they explain further on the bottom. These questions include disclosure of :
- Death that occurred in the home within the last 3 years
- Any drug or chemical grown on premises that can pose a health hazard
- Room additions without necessary permits
- Any encroachments or easements: while they will likely be displayed on the title, it is necessary to outline them on the TDS as well
- Any flooding, drainage, or grading problems
- Any co-owned or shared areas on the property (driveway, pool, etc.)
How Much Should A Seller Disclose?
In truth, the more you disclose, the better it is- for both the buyer and the seller. Giving a buyer an honest and accurate assessment of your property will establish trust and ultimately a smoother transaction.
Do I Need to Complete a TDS if My Property is Being Sold “As-Is”?
It’s pretty hard to avoid the TDS when selling a residential property in California. Some homeowners mistakenly believe that if their property is being sold “as is”, they are not required to complete a disclosure statement. C.A.R. requires a TDS on any sale of residential property of 1-4 units in California, regardless of current condition.
Agent Visual Inspection Disclosure (AVID) in California:
In addition to the seller disclosure form (TDS), the Real Estate Agent who has listed your home will conduct a peripheral inspection of all visible areas of the home. The listing agent will then complete an agency disclosure form which will be given to the prospective purchaser. This form, similar to the TDS, outlines material facts affecting the value or desirability of that property.
Home Inspections and Disclosures:
The majority of home buyers will have inspections done during the buyer inspection contingency period, to investigate the condition of the home. The TDS provides a brief overview of the condition of the property, according to the owner’s best knowledge. Although a buyer may choose to remove an inspection contingency of their own volition, the TDS does not serve as a replacement for general home inspections.
In Conclusion:
It is worthwhile for California home sellers to disclose all known material facts about their property. The TDS only requires that which is known at the time of sale to be disclosed. Being honest and upfront will only serve as a benefit to both the sellers and the buyers of the property for sale!
About The Bienstock Group:
The Bienstock Group, led by Sheri Bienstock, is an expert real estate group in Los Angeles, Hancock Park, and Miracle Mile. Sheri is committed to her clients and will invest all her effort to get you the best results possible. Sheri has 235+ five-star reviews on Zillow, and has been ranked #1 listing agent in 90036 since 2009 and in Hancock Park since 2016.
