A California residential real estate purchase agreement (“Contract for Sale and Purchase of Real Estate”) is a contract which commits a buyer to an offer to purchase real estate, according to specific terms agreed by the buyer and seller. Negotiated specifics include the purchase price, financing method, closing date, and more.
Do Sellers in California Have To Disclose Property Defects?
California does require real estate sellers to disclose all known material defects with a property. The Department of Real Estate hosts a detailed publication which specifies the language of all necessary disclosures, as well as the situations in which they apply (or don’t).
There may be cases, such as a foreclosure sale or a sale made with an explicit written waiver, where the seller does not have to use the language and forms specified by the disclosure statute. However, even the sale of property “as is” will still require the seller to disclose all defects with a property that are not immediately obvious on a casual inspection.
Required Seller Disclosures in California
California sellers of real estate must disclose any material and legal defects with the property. This is a non-exhaustive list of other disclosures they may have to provide:
- Structural Integrity Update: Reports on aspects of the the property’s structural integrity which may impact the safety of residents.
- Hazardous Materials Update: Reports on hazardous materials on the property, such as:
- Asbestos
- Radon gas
- Contaminated soil
- Water intrusion
- Fire Detector Compliance Statement: Applicable to buyers seeking to purchase a single-family home. Confirms compliance with state fire detector laws.
- Lead-Based Paint Disclosure: Any home constructed earlier than 1978 must come with a disclosure upon the transfer of the property which includes any information about the presence of lead on the premises, as well as educational materials that communicate the health risks associated with lead exposure.
- Natural Hazard Disclosure Statement: Informs a buyer of real estate when a property contains any of the following potential natural hazards:
- Potential flooding area
- Very high fire hazard severity zone
- Seismic hazard zone
- Delineated earthquake fault zone
- Special flood hazard area
- Wildland fire zone
- Structural Pest Control Report: Applicable when the sales contract or financing for a property purchase require a report regarding pests or other organisms which could damage a structure. California law regulates the requirements for the inspection and the report.
- Transfer Disclosure Statement: Lists known issues which could negatively impact a home’s value or pose an unreasonable risk to the buyer’s safety or health.
- Water Heater Compliance Statement: Provides written confirmation that a property’s water heater is properly secured to prevent displacement in case of earthquake.
Sources
- 1 Karoutas v. Homefed Bank, 232 Cal.App.3d 767, 774-73 (Cal. Ct. App. 1991)
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Neither the nonjudicial foreclosure statutes nor section 1102.1 prevents us from finding a duty to disclose.
Source Link - 2 Lingsch v. Savage, 213 Cal.App.2d 729, 735 (Cal. Ct. App. 1963)
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It is now settled in California that where the seller knows of facts materially affecting the value or desirability of the property which are known or accessible only to him and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer.
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