Real Estate Seller Disclosures: What to Know
When selling real estate, it's crucial to disclose certain information to potential buyers to ensure a fair and transparent transaction. While state law outlines many of these requirements, there are additional obligations sellers need to be aware of to comply with the purchase agreement and common law.
In this article, we'll briefly cover everything you need to know about real estate disclosure requirements, from the basics mandated by law to the additional information you should include in your disclosures. Whether you're a seasoned real estate professional or a first-time seller, understanding your disclosure obligations is essential for a successful and legally compliant transaction.
Statutory Disclosures
The California Civil Code requires a seller of real property to deliver to the buyer a variety of disclosures, including without limitation:
Real Estate Transfer Disclosure Statement;
Natural Hazard Disclosure Statement;
Notice or Actual Knowledge of Release of Illegal Controlled Substance;
Notice of Special Tax and/or Assessments;
Notice of Industrial Use and Military Ordinance Location; and
if the property is in a high or very high fire hazard severity area, the information, notices, documentation, and agreements required by Section 1102.6(f) and 1102.19 of the Civil Code.
Many of these disclosures are often made on standard forms provided by the California Association of Realtors.
Contractual Disclosures
A purchase agreement will often require sellers to make additional disclosures beyond what is mandated by statute. This can include a Seller Property Questionnaire; information regarding any covenants, conditions, and restrictions applicable to the property; notice of insurance claims recently filed; and information about solar panels, among other items. The purchase agreement will typically provide a timeframe within which the seller must deliver these disclosures to the buyer, and a timeframe for the buyer’s review of such information, as well as a buyer’s rights (if any) to cancel the purchase agreement based on their review of the seller’s disclosures.
Common Law Disclosures
In addition to the mandated disclosures, sellers must disclose any fact materially affecting the value and desirability of the property, including, but not limited to, the physical conditions of the property and previously received reports of physical inspections. This may require a seller to provide information beyond the questions asked in standard disclosure forms.
It is also important to note that many of the standard disclosure forms call for the seller’s actual knowledge or awareness of material facts. However, a condition may exist where the seller does not have actual knowledge of certain facts, but a seller exercising reasonable care and diligence should have known such facts under the circumstances. Therefore, it is imperative for the seller to act reasonably when making disclosures and for the prospective buyer to exercise caution when relying solely upon seller disclosure forms.
Selling real property involves many moving pieces, which can expose you to a large amount of liability. While these disclosure obligations may seem daunting, an experienced attorney can advise you on the disclosures that are not only required but also advisable in your particular real estate transaction, ultimately helping to mitigate the risk of liability for failing to disclose material information to the buyer.
Are you planning to sell your real estate property and want to ensure that you are meeting all the disclosure requirements? Our team of real estate attorneys can help you navigate the legal landscape and provide guidance on the disclosures you need to make. Contact our office today to speak with one of our knowledgeable professionals and get the support you need for a successful transaction.