Understanding California's real estate disclosure laws is crucial for buyers to protect their investment and avoid surprises. By asking the right questions and getting a thorough inspection, buyers can ensure they are making a sound decision when purchasing a home. Keep in mind that the most important thing you can do in this area is choose your realtor carefully, selecting a team like us that has the experience you need to make a confident decision will help you navigate real estate disclosures as well as the entirety of the the home buying process. However, in addition to having the right team on your side, it's helpful to understand real estate disclosures yourself.
What are real estate disclosures?
Real estate disclosures are documents or statements provided by the seller that disclose any known material defects or issues with a property. Each state has different requirements, so if you are relocating to or investing in a rental property, you may not be familiar with ours. These disclosures are required by law in most states, including California, to ensure transparency between the seller and buyer. In California, the law mandates that sellers must inform buyers of any known issues that could significantly affect the property's value or pose a danger to its occupants. These real estate disclosures allow you to make informed decisions, and potentially renegotiate the terms of the sale if necessary.
California's Real Estate Disclosure Requirements
California law requires that sellers disclose any known material defects that are not immediately visible or obvious to the buyer. A material defect refers to an issue that would affect the property's market value or safety. Sellers must provide this information to potential buyers, even if the buyer doesn’t specifically ask for it. These are some of the real estate disclosures that are common to see in California:
- Structural Issues: Sellers must disclose any issues with the foundation, roof, or structural integrity of the home. This can include cracks, water damage, or any previous repairs related to structural problems. Before buying a home with any serious structural issues, you need to be extra cautious.
- Water Damage and Mold: If there has been previous flooding, water intrusion, or any mold-related issues, the seller must disclose this. California’s humid climate, in addition to tropical storms and flooding, makes mold and water damage a particular concern, so buyers need to know if the property has had any past or present moisture issues.
- Pest Infestations: California’s warm climate can attract pests, such as termites or rodents. Sellers must disclose if the property has experienced infestations or has a history of pest problems, which helps you make an informed purchase.
- Property Boundaries and Easements: Any disputes over property boundaries or easements must be disclosed, as they could affect how you can use the property after becoming the owner.
- Homeowners Association (HOA) Rules and Fees: If the property is part of a homeowners association (HOA), the seller must inform the buyer of the HOA rules, fees, and any outstanding violations. Florida law requires that the buyer be given a copy of the HOA's governing documents. This will be particularly helpful if you're buying a condo or a home in a gated community where the HOA makes a big impact on your life.
- Lead-Based Paint: If the home you're looking at was built before 1978, federal law requires that the seller provide a disclosure about the potential presence of lead-based paint. This is not exclusive to California, and applies nationwide. It's important to pay attention because of the health hazards presented by the presence of lead paint.
Unique California Disclosures
California is a unique place to live, and as you might expect there are also some real estate disclosures unique to our state. You might see real estate disclosures like these when you're house hunting:
- Natural Hazards Sellers are required to disclose if the property is located in a natural hazard zone, such as areas susceptible to earthquakes, floods, or wildfires.
- Lead Paint For homes built before 1978, sellers must inform buyers of the potential presence of lead-based paint, which can pose health risks.
- Pests Sellers must disclose any existing pest problems, such as termites, rodents, or other infestations, that may affect the property.
- Legal Issues Sellers are obligated to report any liens, bankruptcy proceedings, or legal matters that could impact the sale of the property.
- Seller's Information The seller's information section in the Transfer Disclosure Statement includes details about systems, appliances, and other items that are included with the home.
- Material Facts Sellers must disclose all material facts that could influence the property's value or appeal to potential buyers.
The key to navigating all of these disclosures is choosing a real estate team you can trust, and we can help. Ready to learn more about buying a home in Palm Springs or Palm Desert? Give us a call!