What must be disclosed before a real estate sale in California?

There are a number of items that must be disclosed before the sale of a commercial or residential property in California.

Selling a residential or commercial property in California is a regulated process. Clearly, these transactions are not as simple as money changing hands and someone else assuming ownerships. There are several measures that even the most basic sale should include, excepting only properties transferred by court order or between co-owners.

One of those measures is to disclose certain aspects of the property in question. Here is an overview of the seller's responsibility to alert buyers about specific conditions.

A transfer disclosure statement

Under the law, sellers must complete a transfer disclosure statement. This statement will include information regarding the following:

  • Structural information regarding items such as the roof or foundation
  • If any additions have been made to the property
  • Damage or defects on the property
  • Whether deaths have occurred in the last three years on the property
  • Information about appliances that will stay or leave
  • Easements or encroachments on the property

If there are noise issues in the neighborhood, environmental hazards, a homeowners' association or zoning violations, all this must be recorded in the transfer disclosure statement. Further, if any of these issues is present, the form enables sellers to explain the circumstances.

National hazard disclosure

California also requires sellers to fill out a statement regarding natural hazards. This specifically identifies whether or not the property is located in a flood zone, in an area with risk of forest fires, or if it is in an earthquake fault zone. People who are not sure about this information may consult a real estate agent or local government entity to secure the answers.

Registered sex offenders

State law requires that real estate contracts include information about registered sex offenders. Sellers do not need to identify specifically were sex offenders may live near the property. However, the contract must have a notice alerting buyers as to where they can access information on how to locate sex offenders in the area.

Failure to disclose

Suppose the sale of a property goes through, and the buyer later discovers serious issues that should have been identified in the disclosure. What happens next? In order to seek legal remedy, the issue must have been something that the seller knew about and purposefully concealed. When that happens, buyers have the right to sue the seller for fraud. Further, there may be a case against the seller's agent and the person who conducted the inspection, if the parties aided in the cover-up.

These disclosure statements are essential for both buyers and sellers, as they could prevent legal issues down the road. Anyone who has questions about this issue should speak with a real estate attorney in California.