BuyersSellers September 18, 2023

Property Disclosures

Property disclosures refer to the legal requirement for sellers of residential real estate to provide potential buyers with information about the condition of the property. These disclosures are intended to protect buyers by ensuring that they have a clear understanding of the property’s condition and any known issues before completing the purchase. The specific disclosures required in California are governed by state laws and regulations. The list of disclosures required in any transaction is long but here are some key property disclosures commonly required in California:

1. Natural Hazard Disclosure Statement (NHDS):
– California is prone to various natural hazards, including earthquakes, floods, and wildfires. The NHDS informs buyers whether the property is located in an area with these types of risks. It is typically prepared by a third-party disclosure company. If requested NHD packet provide the current property tax rate and any special assessments or bonds that may affect property taxes.

2. Transfer Disclosure Statement (TDS):
– The TDS is a comprehensive disclosure form that sellers are required to complete. It asks the seller to provide information about the property’s condition, including any known defects or problems. Sellers must disclose issues related to the property’s structure, systems (e.g., plumbing, electrical), and any past or ongoing problems such as water leaks, pests, or hazardous materials.

3.  Sellers Property Questioner (SPQ):
– The SPQ is a document used in real estate transactions to gather information about the condition of a property from the seller’s perspective. The purpose of the Seller Property Questionnaire is to disclose any known issues or defects related to the property’s condition, history, or maintenance. This information helps potential buyers make informed decisions about whether to proceed with the purchase and whether any specific inspections or repairs are needed.

4. Agent Visual Disclosure (AVID):
– AVID, often referred to as an “agent walkthrough” or “agent visual inspection disclosure,” is a process in a residential real estate transaction where the seller’s real estate agent, or a designated representative, conducts a visual inspection of the property to identify any visible defects, issues, or changes since the property was listed for sale. It’s important for both buyers and sellers to recognize that while an agent visual inspection can provide valuable information, it may not uncover all potential issues with the property. Buyers should still proceed with a professional home inspection to get a complete and unbiased assessment of the property’s condition before finalizing the purchase.

5. Lead-Based Paint Disclosure:
– For homes built before 1978, federal law requires sellers to provide buyers with information about the presence of lead-based paint in the property and any known hazards associated with it.

6. Megan’s Law Disclosure:
– California law mandates that sellers must disclose whether the property is located in close proximity to a registered sex offender. Buyers can independently check the state’s Megan’s Law website for more information.

7. Smoke Detector and Water Heater Compliance:
– Sellers must disclose whether the property is equipped with smoke detectors and, if applicable, whether the water heater is properly braced and anchored according to state requirements.

8. Homeowner’s Association (HOA) Documents:
– If the property is part of an HOA, sellers are required to provide various documents related to the HOA, such as the HOA’s governing documents, financial statements, and rules and regulations.

9. Death on the Property:
– Sellers must disclose if a death occurred on the property within the last three years due to natural causes, suicide, homicide, or accident. This disclosure includes deaths inside the home or on the property.

10. Property Inspections:
– The specific inspections needed can depend on factors such as the property’s age, location, and condition. Sellers should work with their real estate agents and professionals to determine which inspections are necessary and to compile the inspection reports and disclosures for the packet.

It’s essential for both buyers and sellers to take property disclosures seriously. Buyers should carefully review all disclosures provided by the seller and ask questions about any concerns. Sellers should be truthful and complete in their disclosures to avoid potential legal issues in the future.

Keep in mind that real estate transactions can be complex, and it’s advisable to work with experienced real estate agents, attorneys, or professionals who are knowledgeable about California’s disclosure requirements to ensure compliance with all applicable laws and regulations.