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What Are the Mandatory Real Estate Disclosures in California?


Just like realtors, home sellers have to follow certain rules that are designed to protect home buyer’s interests. California has specific requirements regarding disclosure. If you’re selling a home in this state, you have to reveal material facts pertaining to the condition of your property to enable potential buyers to make informed choices.

Here’s a look at the mandatory disclosures in California.

California Transfer Disclosure Statement (TDS)

As per federal law, a home seller must notify potential buyers about any presence of lead paint. The other important issues are declared in the California Transfer Disclosure Statement (TDS) under state law. As a seller, you must fill this form to inform your buyers about any defects or malfunctions in your knowledge.

The document requires answers to specific questions about the state of different property features including the roof, flooring, and electronic wiring. You’ll need to declare whether your house has certain items in place, like fire alarm systems, dishwashers or an in-ground pool.

Additional information is required on matters such as hazardous disclosure for earthquakes and flooding. Make sure to consult with your realtor about the necessary declarations to comply with the law when selling your property. Just don’t miss any important material fact, even if it’s not expressly listed on the TDS form.

Declaring Material Facts

Generally, a material fact in real estate selling is any detail that could impact a potential buyer’s purchase choice. If you’re aware of any such piece of information regarding the property you’ve put on sale, California law requires you to disclose it.

For instance, the state requires that you notify the buyer if somebody has died in the house within the past three years. That material factor may affect a prospective buyer’s final decision. You may choose not to declare if you know that somebody died on the property four years ago. If the cause of that death were natural, it may not matter to a would-be buyer.

However, violent death in a burglary could be material to a prospect because it has security implications. A potential buyer would similarly be concerned if the property next to yours was a halfway house hosting sex offenders. Conversely, the same property might not bother a buyer if it houses white-collar lawbreakers.

What Happens If You Don’t Disclose Material Facts?

Failure to disclose material facts regarding a property you’re selling may result in severe legal ramifications in the future. If the buyer discovers an uncomfortable issue that you failed to reveal, they could sue you and demand compensation.

In the event you’re sued, the court will assess whether you were aware of the material fact in question. You may still be liable if the court determines that a reasonable person in your circumstances should have known about the malfunction or concern.

Therefore, you must be honest about your real estate transactions to avoid paying heavy penalties for non-disclosure. Your realtor may nonetheless disclose the necessary information as per their professional code of conduct.

These are some of the California disclosure requirements you should satisfy when selling your home. If you’re looking to buy or sell a home in the Hermosa Beach area, contact the experts at Brighton Escrow today. We are happy to offer you a top-tier escrow service.