Is The Property Condition Disclosure Your Friend?

Property Condition  Disclosure

Is the property condition disclosure is your friend? When you list your Sacramento home for sale, you’ll be asked to fill out a property condition disclosure form known in California as a Transfer Disclosure Statement (TDS). You’ll also fill out the California Natural Hazard Disclosure Statement.

These detailed forms are required when transferring ownership of residential property of 1 to 4 units. The questions cover every material fact about the home and any appliances that will transfer with the home. Contrary to the laws in some states, sellers are also required to disclose the location of registered sex offenders. This information can be found via a map search at the California Megan’s Law website. The Residential Purchase Agreement contains this information and that covers the required disclosure. If a seller actually had direct knowledge of a registered sex offender in the neighborhood, this would be disclosed. (https://www.meganslaw.ca.gov/)

The property condition disclosure, along with others, must be given to the potential buyer. I have these filled out in advance for buyer review before the final purchase agreement is signed. Otherwise, the buyer has the option to terminate the contract within 3 days of receiving the disclosure. To fill out the forms correctly requires time and thought. In other words, it’s tedious work. Sellers are encouraged to fill out disclosures as soon as possible. However, it is important to fill out the property condition disclosure completely and accurately.

In California, home sellers are also required to report a death that occurred in the house within the past 3 years that was not AIDS-related. California law also requires emotional defect disclosures, but only if it has occurred in the past five years. In other words, an alleged haunting that occurred ten years ago need not be disclosed, but if residents report ghostly sightings at every full moon, it must be disclosed.

Completed disclosures help to offer some protection from disclosure related lawsuits, although, a lawsuit can happen if you have done everything correctly.

Some sellers ask questions about how much information to include on their property condition disclosure forms. They sometimes fear that the truth will scare buyers away. Perhaps in some cases, with some buyers, it will. But, it’s far better to wait for a different buyer than to end up in court later.

One well-known California couple tried to hide the fact that a large skylight leaked. They were “lucky” in that no agents or buyers came by on rainy days. They weren’t so lucky when the ensuing lawsuit cost them more than a million dollars. Their excuse for failing to disclose the leak was that it hadn’t been disclosed to them when they purchased the house.

A couple in another state falsified the results of a septic system inspection, saying it was in fine condition when, in fact, the inspector said it was failing. In the resultant lawsuit, the buyers were awarded triple damages. When you have disclosed every known defect about your house, you have done your best to be protected from lawsuits regarding those defects. This is because the buyers must attest to the fact that they have read your report.

If they skimmed the report and missed something, or if they read it, didn’t understand, and didn’t seek an explanation, it becomes their problem – not yours. If there’s a question on the form and you honestly don’t know the answer, you can say you don’t know. However, if you do know and choose to say you don’t, beware. There will be a neighbor somewhere who knows that you knew, and they’ll tell someone.

Even if you are not required to disclose a fact, such as a violent crime that occurred many years ago, you may be required to respond if asked directly. You can check with your company Attorney to confirm how to best handle these particular types of questions. However, saying “no” if you know the answer to be “yes” could ultimately lead you into court. I am a declared a “Probate Expert” to provide testimony in the Sacramento Superior Court, Probate Division.

I do sell homicide and suicide properties and have over the last 12 years. I have never sold a haunted house to the best of my knowledge. However, a Realtor who represented a buyer on a Probate listing reported to me, that she was in conversation with the decedent and that he had jumped up into her truck and had a conversation with her. My reply, “I have no special abilities like yours I just sell the real estate.”

The same rules hold true for your Realtor ®. He or she must disclose all known facts that would influence the price or the sale of a home.  Realtors also fill out an Agent Visual Inspection Disclosure (AVID) form. This is a visual disclosure. As Realtors we do not craw under foundations or go up into attics as we are not certified to do inspections. This form is for defects or items of interest such as power lines and or telephone wires across the back yard. Though these lines are not a defect they can be a concern for some buyers.

If you want to hire Realtors who make sure all disclosures are completed and in your file, call Weintraub & Wallace Realtors with RE/MAX Gold, at 916-233-6759

— JaCi Wallace

JaCi Wallace
Weintraub & Wallace

Subscribe to Elizabeth Weintraub's Blog via email


Sorry we are experiencing system issues. Please try again.