California Seller Disclosures: What You’re Legally Required to Reveal

California Seller Disclosures: What You’re Legally Required to Reveal

Selling a home in California comes with legal responsibilities, particularly regarding seller disclosures. Under state law, sellers must disclose known defects and any issues that could affect a property’s value or desirability. This transparency helps protect buyers and ensures fair transactions.

Failing to disclose material defects can lead to legal consequences, including lawsuits, financial liability, and even rescission of the sale. Whether you’re a seller preparing to list your home or a buyer evaluating a purchase, understanding disclosure requirements is essential.

What Must Sellers Disclose in California?

California law mandates that sellers provide a Transfer Disclosure Statement (TDS), a legally required document that outlines the condition of the property. Some of the most critical areas sellers must disclose include:

1. Structural and Safety Issues

Sellers must inform buyers of any known structural problems, including:

  • Foundation concerns – cracks, settling, or instability.
  • Roof damage – leaks, missing shingles, or repairs.
  • Pest infestations – termites, rodents, or other pests that could affect the home’s integrity.

2. Water Damage and Plumbing Issues

Water damage is a serious concern that must be disclosed, including:

  • Flooding history – past flooding incidents or water intrusion.
  • Mold presence – including prior mold remediation efforts.
  • Plumbing issues – leaks, broken pipes, or persistent water-related problems.

3. Previous Repairs and Renovations

Sellers must disclose past repairs and renovations, especially those affecting safety or structural integrity:

  • Major renovations – including those requiring permits.
  • Electrical and HVAC system work – repairs or replacements.

4. Environmental Hazards

Certain environmental hazards require disclosure, including:

  • Lead-based paint – required for homes built before 1978.
  • Asbestos – found in insulation or other materials.
  • Radon gas – if levels exceed safe limits.

5. Neighborhood and External Factors

  • Noise disturbances – such as nearby airports or train tracks.
  • Legal disputes – ongoing property-related legal issues.
  • HOA restrictions – any rules or pending assessments from a homeowners’ association.

Legal Consequences of Failing to Disclose

Failing to disclose defects in California can result in serious legal repercussions, including:

  • Lawsuits for misrepresentation – Buyers can sue if they discover undisclosed defects.
  • Financial liability – Sellers may be responsible for repair costs, legal fees, and damages.
  • Rescission of the sale – Courts may reverse the transaction, forcing the seller to take back the property.

What Buyers Can Do if a Seller Fails to Disclose

If buyers discover undisclosed defects after purchase, they have several options:

  1. Gather evidence – Take photos, get repair estimates, and keep documentation.
  2. Consult a real estate attorney – Legal guidance can determine the best course of action.
  3. Negotiate with the seller – Some disputes can be resolved outside of court.
  4. File a lawsuit – If necessary, buyers can sue for damages or demand rescission of the sale.
  5. Report the violation – Complaints can be filed with the California Department of Real Estate (DRE).

Key Takeaways

  • California requires sellers to disclose known defects affecting a property’s value.
  • The Transfer Disclosure Statement (TDS) is a legally required document for transparency.
  • Failing to disclose defects can result in lawsuits, financial liability, and potential reversal of the sale.
  • Buyers who discover undisclosed issues can seek legal action against the seller.

Need Legal Guidance?

If you’re a seller unsure about disclosure obligations or a buyer facing misrepresentation, legal advice can protect your rights. Alex Knaub & Associates specializes in California real estate law and can help you navigate these complex issues.

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