Residential property sellers in California must give disclosures under Section 1102 of the California Civil Code. In writing, they describe the property they’ve listed for sale. Nearly every residential property in California is subject to these mandatory disclosures. Included are standalone residences, high-rise apartment units, and manufactured or mobile homes, among others.
Why is Disclosing Important?
The reason why these disclosures are so important is because potential buyers need to know as much as possible about the property in order to evaluate whether they really want to buy it and if so. This involves determining what a reasonable purchasing price is and whether or not the house need any repairs or upgrades.
The disclosure obligations also remind California home sellers that they have a legal responsibility to be open about a property’s condition and can be sued for hiding problems or defects.
When Must Sellers Provide Disclosure Information?
In California, a seller needs to provide these disclosures to a prospective buyer as soon as possible before transfer of title. Although this language is a bit vague, the intent is to get the disclosure to the buyer in a timely fashion. Thus, as a practical matter, this usually happens early in the purchase process.
Some sellers, for example, will prepare all disclosures, inspections, and other paperwork before marketing their home. So that serious proposals can be received, everything is in place. A copy of the disclosures may be made by other sellers. If the disclosures reveal any unexpected information regarding the property, the buyer has the opportunity to back out or renegotiate.
If a seller fails to make required disclosures to prospective purchasers before the two of them sign the purchase agreement. The buyer can then choose to end the contract.
As a result, it’s critical for a seller to give these disclosures as quickly as possible to serious potential buyers. So that the chances of a buyer canceling an offer later owing to information in the disclosure are reduced.
How to Fill Out the Standard California Disclosure Forms?
In California, seller disclosure requirements are strict and thorough. California provides a standard format, as referred to in Civil Code Section 1102, which sellers must use when making these disclosures. The resulting form, called the “Transfer Disclosure Statement,” can be obtained from your California real estate agent.
The Transfer Disclosure Statement form covers a broad range of topics, from structural information about the home, such as a leaky roof to whether any deaths occurred on the property in the last three (3) years. In addition, the seller must provide details on all of the home’s appliances. Included are those that are for sale, as well as whether or not they are functional. The seller will also need to disclose any room additions, damage, or neighborhood noise problems. Finally, the vendor must attest that they have followed all applicable California laws. For example, smoke detectors are mandatory, and the water heater must drop or slide horizontally in the event of an earthquake.
What If the Seller is Unsure Whether They Need to Disclose a Defect?
As a general rule, the more the seller discloses, the better it is for both the seller and buyer. Remember, just because the seller discloses an issue does not mean they must 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, revealing more information than the seller must to can aid the transaction. The buyer’s real estate agent will be happy to find that the seller has submitted a fully completed Transfer Disclose Statement form, as will the buyer. It shows that the seller is thorough and are taking the home sale seriously.