Seller Disclosures and Buyer Investigations
When it comes to buying or selling property in California, transparency is key. Disclosures are the bridge to ensuring that buyers are informed about a property's condition, potential hazards, and financial obligations. Sellers are required to disclose all known material facts about the property, whether obvious or not. However, buyers should not rely solely on the seller’s disclosures. It is essential for buyers to conduct their own thorough investigations.
Buyer’s Responsibility in Property Investigation
When purchasing property, buyers must investigate its condition and suitability thoroughly. This includes assessing physical features, environmental factors, and legal considerations. Sellers and brokers do not guarantee the property’s condition, so buyers must take proactive steps to understand what they are buying.
What to Investigate
Property Condition: Inspect the foundation, roof, plumbing, electrical systems, appliances, and overall structure.
Size and Boundaries: Verify square footage, lot dimensions, and property lines.
Pest and Soil Issues: Check for wood-destroying pests, soil stability, and drainage.
Utilities and Waste Systems: Ensure water quality, availability, and proper functioning of sewer or septic systems.
Environmental Hazards: Investigate potential risks like lead paint, mold, asbestos, and radon gas.
Natural Disaster Risks: Understand the property’s susceptibility to earthquakes, floods, or fire.
Permits and Zoning: Confirm building permits, zoning laws, and any restrictions affecting future use.
Insurance: Determine the availability and cost of necessary insurance.
Neighborhood Factors: Research local crime, schools, transportation, and environmental nuisances.
The inspection contingency period allows buyers to review the seller’s disclosures and perform these investigations to ensure the property meets their satisfaction before proceeding. Buyers must take an active role in verifying all information to avoid surprises.
Real estate disclosures are legal requirements that help buyers make informed decisions. They prevent fraud, misrepresentation, and costly surprises after the deal closes. Both sellers and their agents must disclose any known issues that could affect the property’s value or desirability.
Failure to disclose can lead to legal consequences.
Real Estate Disclosures Sellers Must Provide
California law requires several seller’s disclosures, especially for residential properties with 1-4 units. Here are the most common ones:
Transfer Disclosure Statement (TDS)
The TDS outlines the property’s condition. Sellers must disclose issues like leaks, structural problems, or faulty appliances. This document gives buyers a clear picture of the home’s state and is legally required for most sales.Natural Hazard Disclosure (NHD)
Properties located in areas prone to natural disasters—like flood zones, earthquake fault zones, or wildfire-prone areas—require this disclosure. Sellers (or their agents) must use official maps to identify these risks and include the findings in an NHD Statement.Lead-Based Paint Disclosure
For homes built before 1978, sellers must inform buyers about potential lead-based paint hazards. They are also required to provide an EPA pamphlet titled “Protect Your Family From Lead in Your Home.” Buyers must be given the option to inspect for lead-based paint during the escrow period.Mello-Roos Taxes
Properties in special districts may incur additional taxes to fund public services like schools or infrastructure. Sellers must disclose these costs to buyers to prevent financial surprises down the line.Methamphetamine Contamination
If a property was previously used as a meth lab, sellers must disclose this information. The property cannot be sold or inhabited until it is deemed safe by local health officials.Property-Specific Details
Additional disclosures may include:Known environmental hazards (e.g., asbestos or contaminated soil).
Shared maintenance responsibilities (e.g., for fences or driveways).
Additions or renovations done without permits.
Zoning or neighborhood nuisances.
Marketing & Pre-Sale Tips
Consider pre-sale inspections to address defects and improve marketability.
Disclose all repairs or known issues, even after inspections.
Protect valuables during showings and ensure adequate insurance coverage.
Professional Guidance
Seek legal or tax advice for implications of selling your property, including withholding taxes and discrimination laws.Contractual & Legal Requirements
Buyers may request repairs, which can influence sale terms.
Compliance with federal, state, and local laws for smoke alarms, carbon monoxide detectors, and other safety features is mandatory.
Agent Responsibilities in Disclosures
Real estate agents play a critical role in the disclosure process. Here’s what they’re expected to do:
Conduct a Visual Inspection: Agents must perform a reasonably competent inspection of accessible areas and disclose anything that could affect the property’s value, such as cracks in the foundation or water stains.
Explain Agency Roles: Buyers and sellers should understand if the agent represents just the seller, just the buyer, or both parties in a dual-agency role. This relationship must be disclosed in writing.
Facilitate the Disclosure Process: Agents must ensure all required disclosure documents are completed, signed, and delivered to the buyer.
Buyer Protections and Rights
Buyers have significant protections when it comes to disclosures:
Review Period: If disclosures are provided after the purchase agreement is signed, buyers typically have 3-5 days to review them and decide whether to proceed or cancel the deal.
Right to Inspect: Buyers can hire professionals to inspect the property for structural issues, hazardous materials, or other concerns. Inspections are encouraged for older, newer, and all homes.
Recourse for Misrepresentation: Buyers may pursue legal action for damages if a seller or agent fails to disclose known issues.
Diverse Property Types and Local Zones Disclosures
In addition to general disclosures, certain property types or situations require extra transparency:
Condominiums and Common Interest Developments (CIDs): Sellers must provide governing documents, financial statements, and details on unresolved violations or defects.
High Fire Hazard Zones: Properties in wildfire-prone areas must meet specific maintenance standards and disclose fire risk.
Seismic Safety: Homes built before 1960 may require additional disclosures about earthquake safety features like braced foundations and water heaters.
Disclosure Requirements for Commercial and Multi-Unit Real Estate
The Commercial Seller Property Questionnaire (CSPQ) is a critical tool for sellers of commercial properties and residential properties with five or more units in California. This form ensures that buyers receive vital information about the property, such as structural modifications, environmental hazards, permits, zoning compliance, and operational systems like plumbing, electrical, and HVAC. It also covers statutory requirements, such as the use of water-conserving fixtures for properties built before 1994 and earthquake safety standards for older buildings.
By answering the CSPQ, sellers disclose known material facts that may affect the property's value or desirability, ensuring transparency and reducing the risk of misunderstandings. While the CSPQ does not replace professional inspections or buyer due diligence, it is key in facilitating smoother transactions by highlighting potential concerns early. Sellers are encouraged to provide detailed, honest responses, as this form protects both parties from disputes and supports informed decision-making in complex real estate transactions.
Exempt Seller Disclosure (ESD)
The Exempt Seller Disclosure (ESD) is used by sellers exempt from providing a Real Estate Transfer Disclosure Statement (TDS), such as those involved in trust, probate, or foreclosure sales. Despite the exemption, sellers must disclose any known material facts or defects affecting the property through Exempt seller disclosures. Sellers must disclose issues like death on the property (within 3 years), contamination, proximity to industrial zones, military ordnance areas, insurance claims, and title matters. Buyers must sign the form to confirm receipt and understanding. The ESD ensures transparency while emphasizing the buyer's role in thoroughly investigating the property.
Stay Updated and Protected
Disclosure requirements can vary based on the property and transaction type. Consulting a knowledgeable real estate professional or attorney is essential to ensure compliance with California law. Disclosures not only protect buyers but also shield sellers and agents from legal disputes.
If you’re buying or selling property, understanding these requirements upfront will lead to smoother transactions and fewer surprises along the way. Seller disclosures protect both parties. The more complete and honest your forms are, the smoother your escrow and the stronger your legal protection.
Bottom Line
With ever-changing disclosure requirements and ordinances specific to certain neighborhoods. Deciphering seller disclosures, understanding inspection reports, and knowing how to move forward can be overwhelming without the right guidance.
Selling a home in California comes with one of the most detailed disclosure requirements in the country. State law mandates that sellers share everything they know about a property’s condition, history, and location hazards. You must comply with the required forms, deadlines, and legal protections for both sellers and buyers.
For example Fire Hardening and Defensible Space Disclosure; Required for homes built before 2010 located in high or very high fire hazard severity zones. Sellers must disclose fire resistant features and provide any inspection results understaning these nuances matter for future liability.
If you’re preparing to sell your home in Los Angeles, Santa Monica, or the Westside, contact us for expert guidance on disclosures and strategy to ensure full compliance while maximizing your sale value.
California Seller Disclosure Requirements – FAQs and Key Points
What Is the Seller’s Property Disclosure Statement (SPDS) in California?
In California, the Seller’s Property Disclosure Statement is called the Transfer Disclosure Statement (TDS). It’s a mandatory form that sellers of 1–4 unit residential properties must complete to disclose the condition of the property. The TDS covers a broad range of information about the home, including:
Property Features and Systems: A checklist of the home’s features such as the roof type and age, appliances, HVAC, plumbing, and electrical systems, and whether each is in working condition.
Known Defects or Material Issues: The seller must reveal any known defects or conditions that affect the property’s value or desirability. Examples include structural issues, past water damage, pest infestations, or hazardous materials such as mold or asbestos.
Legal and Statutory Information: The form asks about legally required items such as deaths on the property within three years, neighborhood nuisances, additions or remodels, and compliance with safety features such as smoke detectors and water heater bracing.
Other Required Disclosures: The TDS references additional reports such as the Natural Hazard Disclosure (NHD) or environmental hazard booklets that accompany the form.
In summary, the TDS provides a transparent overview of the home’s condition so that buyers can make an informed decision. It is not a warranty but a good-faith statement of what the seller knows.
Are Sellers Required to Disclose Property Issues Before Receiving an Offer?
California law requires disclosures to be delivered to the buyer as soon as practicable before transfer of title. In practice, most sellers deliver them within seven days after acceptance unless otherwise agreed in writing.
Many listing agents gather and upload disclosures and inspection reports before listing the home. This helps buyers review them early and reduces surprises. If disclosures are provided after an offer is accepted, the buyer has limited cancellation rights.
Buyer Review and Cancellation Period of Disclosures
Under the California Residential Purchase Agreement (RPA), the buyer has 3 days after personal delivery or 5 days after email or mail delivery to cancel based on the disclosures. After that period, the documents are deemed approved.
Sample Seller Disclosure Form (California)
The official disclosure form in California is the Real Estate Transfer Disclosure Statement (TDS), issued by the California Association of Realtors (C.A.R.) under Civil Code §1102. The form is three pages long and includes checkboxes and questions about the home’s features and condition.
Most transactions also include the Seller Property Questionnaire (SPQ) for more detailed responses.
If you’re working with a Realtor, they’ll provide the current version of both forms.
Even “For Sale by Owner” sellers are required to complete them. Always use the latest version to stay compliant.
Mandatory Real Estate Disclosures in California
Transfer Disclosure Statement (TDS)
Discloses all known material defects, malfunctions, or other conditions that affect value or desirability. Usually accompanied by the Seller Property Questionnaire (SPQ).
Natural Hazard Disclosure (NHD)
Required under Civil Code §1103. It informs buyers if the property is in a flood, fire, or earthquake hazard zone.
Lead-Based Paint Disclosure
Applies to homes built before 1978. The seller must provide the EPA booklet “Protect Your Family From Lead in Your Home” and allow up to 10 days for testing unless waived.
Megan’s Law Disclosure
Notifies buyers that the California Department of Justice maintains a public database of registered sex offenders.
Death on the Property Disclosure
Any death within the past three years must be disclosed under Civil Code §1710.2. Older deaths do not need to be volunteered unless a buyer asks directly.
Water Heater, Smoke, and Carbon Monoxide Compliance
The seller must confirm that smoke and carbon monoxide detectors are installed and that the water heater is properly braced to resist earthquake movement.
HOA and Common Interest Disclosures
If the home is part of an HOA or condominium, sellers must provide CC&Rs, bylaws, financials, and meeting minutes per Civil Code §4525. Buyers have five days after receipt to approve or cancel.
Mello-Roos and Special Tax Disclosures
Disclose any community facility district or special assessment taxes.
Environmental and Earthquake Booklets
Sellers must provide both the “Environmental Hazards” and “Homeowner’s Guide to Earthquake Safety” booklets where applicable.
Agent Visual Inspection Disclosure (AVID)
Both the listing and buyer’s agents must visually inspect the property and disclose any observable red flags as required under Civil Code §2079.
Local and City Disclosures
Depending on the city, additional forms may be required such as retrofit certificates, energy conservation reports, rent control information, or transfer tax statements.
Withholding Tax Disclosures (FIRPTA / Cal-FIRPTA)
If the seller is a nonresident, escrow must withhold required taxes unless an exemption form is submitted before closing.
How to Share Disclosures on the MLS
Agents can upload disclosure packets as attachments or supplements on the MLS.
Buyers’ agents can download them directly from the listing page. Uploading them early signals transparency and saves time once offers start coming in.
Legal Timelines and Buyer Rights Under the California Residential Purchase Agreement
When must disclosures be delivered?
Within seven days after offer acceptance unless otherwise agreed.
How long does a buyer have to review disclosures?
Buyers generally have seventeen days after acceptance to complete their inspections and due diligence, though this period can be shortened to make an offer more attractive. Most of the 17-day window covers inspection and contingency timelines, but the exact number of days is negotiable between the parties.
Sellers typically prefer shorter contingency periods so their property isn’t tied up for too long with the risk of the buyer canceling later. As long as the seller delivers all required disclosures on time, the buyer’s review period is five days after delivery or seventeen days after acceptance, whichever is later.
What if the disclosures are delivered late?
The buyer has three days after in-person delivery or five days after email or mail to cancel.
What if new issues arise after disclosures are sent?
The seller must issue an amended disclosure immediately.
What is the Fire Hardening and Defensible Space requirement?
For homes built before 2010 in high or very high fire zones, sellers must complete the Fire Hardening and Defensible Space (FHDS) form and provide any related inspection reports.
What happens if the parties can’t agree on defensible-space compliance?
If the seller and buyer cannot reach an agreement after a Notice to Perform, the seller may cancel the contract.
Are properties sold “as is”?
Yes, unless otherwise agreed. The seller is not required to make repairs but must maintain the home’s condition until close of escrow.
What if the buyer has removed the loan or appraisal contingency?
If the buyer has waived those contingencies, they cannot cancel due to loan denial or low appraisal, and their deposit may be forfeited.
Do both parties sign an agency disclosure?
Yes. Both buyer and seller must sign the Disclosure Regarding Real Estate Agency Relationship form, confirming whether the agent represents one party or both.
Do sellers have to give all keys and access codes at closing?
Yes. Sellers must deliver all keys, garage remotes, gate codes, and alarm passwords at close, even if remaining in possession temporarily.
Property Boundary Disputes and Easements in California
Under California Civil Code §1102 and the Residential Purchase Agreement (RPA-CA), sellers are legally required to disclose any known boundary disputes, encroachments, or easements affecting the property.
This includes:
Any disagreements with neighbors about fences, driveways, retaining walls, or the true property line.
Any easements or rights of way, whether recorded or unrecorded, that allow others access or use of part of the property (for example, utility lines, shared driveways, or access paths).
Any encroachments, structures or improvements that extend over a boundary line, such as a fence or shed partially built on a neighbor’s parcel.
These details appear in Section C of the Transfer Disclosure Statement (TDS), which asks the seller to indicate whether they are aware of any “easements, encroachments, boundary disputes, or zoning violations.”
If the answer is “Yes,” the seller must explain in writing.
Buyers have the right to order a property survey during escrow to confirm boundary lines and ensure no hidden encroachments exist. This step provides clarity and helps prevent future legal or neighbor disputes.
Statute of Limitations for Nondisclosure Claims in California
Fraud or Intentional Misrepresentation: 3 years from discovery
Breach of Written Contract: 4 years
Agent Negligence or Violation (Civil Code §2079): 2 years from close of escrow or possession
To protect yourself, disclose everything upfront. Once a buyer is informed, they cannot claim you concealed it later.
Seller Questionnaire / Disclosure Checklist
Instructions: Answer truthfully to the best of your knowledge. If you don’t know, write “I don’t know.” Attach any relevant documentation or inspection reports.
Basic Property and Occupancy
Are you the current occupant?
When did you take ownership and how long have you owned the property?
Have you conducted inspections or obtained repair reports? (Attach if available)
Systems and Components
Roof age, materials, leaks, or repairs
Plumbing leaks, water pressure, or sewer issues
Electrical defects or panel updates
HVAC or heating and cooling performance
Condition of included appliances
Water supply source and quality
Gas or fuel system condition
Windows, doors, and locks
Interior condition including flooring, walls, and ceilings
Structure and Site Conditions
Foundation cracks or shifting
Drainage or flooding
Soil stability or landslides
Past or present termite or pest issues
Mold, mildew, or water damage
Hazardous materials such as asbestos or lead
Environmental contamination or underground tanks
Easements or boundary disputes
Unpermitted additions or work
Legal and Neighborhood Factors
Noise or nuisance from neighbors or businesses
Zoning or land use concerns
Special assessments or Mello-Roos taxes
HOA rules, litigation, or pending assessments
Liens, judgments, or legal disputes
Local retrofit, energy, or water compliance
Safety and Compliance
Smoke and carbon monoxide detectors installed
Water heater properly braced
Any deaths on the property in the past three years (if yes, explain)
Natural hazard zone (attach NHD report)
Lead-based paint disclosure if built before 1978
Agent visual inspection acknowledgment
Addendum if any new issues arise during escrow
Signatures and Acknowledgments
Seller signature and date
Buyer acknowledgment of receipt
Agent inspection acknowledgment
Statement confirming disclosure made in good faith
List of attached documentation such as reports, permits, and receipts
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