What Do Sellers Have to Disclose in California?

The Transfer Disclosure Statement

California Civil Code section 1102 and the sections that follow require most sellers of one to four unit residential property to complete the TDS. It is a standardized form where you tell the buyer what you know about the home's condition, its systems and its history. Section 1102.3 says it must be delivered as soon as practicable before transfer of title, and for a sales contract, before the contract is made.

What the TDS asks about

Among other things, the form asks whether you are aware of:

• Room additions, structural modifications or other alterations or repairs made without necessary permits, or not in compliance with building codes.
• Fill on the property, settling, slippage, sliding or other soil problems.
• Flooding, drainage or grading problems.
• Major damage from fire, earthquake, floods or landslides.
• Zoning violations, nonconforming uses or setback violations.
• Neighborhood noise problems or other nuisances.
• A homeowners' association with authority over the property, and CC&Rs or other deed restrictions.
• Lawsuits by or against the seller affecting the property, and any notices of abatement or citations.

Answer from what you actually know, and when in doubt, disclose. Other state and local disclosures may also apply, and your agent and escrow will provide them.

The buyer's right to cancel

If the TDS, or a material amendment, is delivered after the buyer has signed an offer, the buyer can terminate by written notice within 3 days after delivery in person, or 5 days after delivery by mail or by agreed electronic delivery. Getting disclosures out early keeps that window from reopening late in escrow.

Who is exempt from the TDS

Civil Code section 1102.2 exempts several kinds of transfers, including:

• Sales under a court order, including sales ordered by a probate court in the administration of an estate.
• Foreclosure sales and trustee's sales, and sales by a lender that took the property by deed in lieu of foreclosure.
• Transfers by a fiduciary administering a trust. This does not apply to an individual trustee of a revocable trust who is a former owner or lived there in the past year.
• Transfers between co-owners, to a spouse or close blood relative, and between spouses under a divorce judgment.

Exempt from the form does not mean free to hide problems. Sellers still should disclose known material facts that affect value or desirability.

Deaths on the property

Under Civil Code section 1710.2, a seller does not have to disclose a death on the property, or how it happened, if it occurred more than three years before the buyer's offer. A death within three years may need to be disclosed. And you may never misrepresent in answer to a direct question.

This is general information, not legal or tax advice. Talk to a California attorney, a CPA, or a HUD-approved housing counselor about your situation.

Tips for a clean disclosure package

• Start early. Fill out disclosures before you list, not after the first offer.
• Gather records: permits, repair invoices, warranties, HOA documents and past inspection reports.
• Be specific. "Roof repaired in 2019 by a licensed contractor, invoice attached" is better than "roof OK."
• If you don't know, say so. Don't guess, and don't leave blanks.
• Consider a pre-listing inspection, so the buyer's inspection holds fewer surprises.
• Update in writing if something changes before closing.

A complete package protects you after closing and makes buyers more confident before it.

Selling as-is still means disclosing

"As-is" means you won't make repairs. It doesn't relieve you of disclosure duties. Joe Hall walks every seller through the disclosure package before the home goes on the market, whether you list for top dollar or sell off market. See your selling options, and if you're weighing a quick sale, read how to spot a real cash buyer.