Disclosure laws vary from state to state; most states require a seller to disclose any and all material facts that might have some impact on value when transferring title to residential property. Section 1102 of the California civil code requires that every residential seller complete the transfer disclosure document as one of the seller’s disclosures. These disclosures are provided to prospective buyers during the contract contingency period. The transfer disclosure statement requirement is just one of many disclosures that should be provided to buyers in a real estate transaction.
A transfer disclosure statement has many questions that the seller needs to answer regarding various aspects of the property condition. A few examples of items sellers need to disclose are: any mold, foundation, termite, electrical, plumbing, or roof issues. The condition of the appliances and other systems also need to be disclosed.
Honesty about your home’s condition is the very best way to avoid future potential problems. Sellers are often reluctant to disclose some items, fearing that they might stigmatize their property. However, just the opposite is true. Not disclosing a known defect is much more damaging and can get you into trouble legally.
Sellers should provide answers to questions to the best of their ability. If any answer is known it should be provided. Sellers are not required to guess. Some sellers are able to respond to these questions better than others. This is usually due to the fact that some simply know more about their property than others, or have a better understanding and knowledge of housing components. This is one very good reason that a buyer should always hire an independent home inspector to satisfy themselves as to the overall condition of the property.
There are a few exceptions to the requirement for transfer disclosure statements. Sellers of commercial property are not required to provide this information in a property transfer. Only residential properties, with one to four units, are required by this law to disclose this information. Certain court ordered sales, probates, bankruptcies, certain family law issues, foreclosures, and bank owned properties are exempt. The list of exemptions to this law is fairly extensive and is not limited to just the examples we have given above.
Real estate agents must also conduct a visual inspection of every residential property and document any “red flags” or similar disclosures. The real estate agent still has the inspection obligation even if the seller is exempt from filling out the transfer disclosure statement.
The best advice we can offer is to disclose as much as you can. If you question for a moment whether or not something need to be disclosed; then disclose it!
All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by San Francisco Examiner.
All information should be independently reviewed and verified for accuracy.
Properties may or may not be listed by the office/agent presenting the information.