Required Disclosures When Selling a Property

Before transferring or selling a property, the transferor or seller must disclose various things under the law. The broad over-arching theme is that sellers must disclose anything that effects the market value of the property. However, that theme can be quite subjective because what one seller thinks of as affecting market value, another seller may not have even considered. In an effort to fill in these subjective gaps, California legislature has passed various statutory requirements.

Please note: this list is not exhaustive.

(1) Statutory Real Estate Transfer Disclosure Statement

When selling a single-family residence (i.e. any real property improved with or consisting of not less than one nor more than four dwelling units) the seller must complete and deliver a statutory disclosure form to the transferee (buyer) unless a statutory exception applies. Any waiver of this requirement is void. The failure to provide such a disclosure allows the buyer to rescind (cancel) the contract.

(2) Local Option Disclosure Statement

If a transferor is required to complete the statutory real estate transfer disclosure statement, the city or county in which the property is located may require the transferor to provide additional disclosures regarding the property.

(3) Natural Hazard Disclosures

Sellers or their agents must notify prospective buyers or tenants when the real property lies within any of the following hazardous areas:

- A special flood hazard area

- An area of potential flooding shown on an inundation map prepared pursuant to Water Code 6161

- A very high fire hazard severity zone

- An earthquake fault zone

- A seismic hazard zone

- A wildland area that may contain substantial forest fire risks and hazards

(4) Earthquake Safety Guides

A seller of a residential dwelling of conventional light-frame construction built before 1960 and containing one-to-four living units must, as soon as practicable before the transfer of title, deliver to the buyer (1) a copy of the Homeowner’s Guide to Earthquake Safety as published by the California Seismic Safety Commission, and (2) an earthquake hazards disclosure statement regarding the property.

A seller of commercial property must comply with substantially the same requirements, except that the Commercial Property Owner’s Guide to Earthquake Safety includes explanations of what constitutes “adequate wall anchorage.”

(5) Smoke Alarms

Every single-family dwelling and factory-built housing unit [see Health & Safety Code   19971] that is sold must have an operable smoke alarm.

(6) Water Heater Bracing

All existing residential water heaters must be braced, anchored, or strapped to resist falling or horizontal displacement due to earthquake motion..