California law requires home sellers to disclose many issues that could be a problem for the next owner. You don’t need to search out problems (the buyer should do that through their own inspection) you’re just required to disclose what you know. Act honestly and in good faith or you risk being sued.
What Must I Disclose? What are Things I Can Keep to Myself?
You can use this standard statement to disclose issues concerning your ownership and your home and property’s physical condition. You should include details on:
- Property tax
- The condition of major appliances
- The condition of major systems like heating and cooling and how they’re fueled
- Property features
- Problems with your roof, water leaks, or flooding
- Violations of local zoning rules
- Easements by others on your property
- Whether any areas are co-owned by others
- Presence of lead-based paint or asbestos
- Past major damage to the property
- If you’re in a flood or earthquake zone
- If you’re in a high or very high fire hazard severity zone whether you’re in compliance with local vegetation management ordinances
California law prohibits omitting or providing false information to a potential buyer. If that happens, the new owner discovers a problem, you can be sued for the cost of repairs and the damages they suffer.
Your disclosures aren’t limited to the form. You need to disclose “material” defects or facts, which may be important issues when a buyer decides to whether to bid on your home and for how much. This doesn’t include whether a former owner died on the property in the past three years or whether an occupant had AIDS.
Just because you list something doesn’t mean you’ll be obligated to repair it before the closing. It may impact the sale price or as part of negotiating the sale, you may agree to fix the problem.
There are Legal Rules and the Golden Rule
There are good reasons to make full and honest disclosures, beyond your legal obligations and potential financial exposure in a lawsuit:
- If you’re selling your house there’s a good chance you’re buying one too. Do unto others as you would have them do unto you. Do you want the seller of your next home hiding serious, expensive problems so the purchase price is more than what the home’s worth? If not, you shouldn’t do that to the people buying your home either
- The inventory of homes for sale is at historic lows while the demand to purchase them is very high, so it’s a seller’s market. Given the demand, prices probably won’t go down any time soon (though that may be impacted if interest rates increase). No house is problem-free and honestly disclosing your home’s issues shouldn’t prevent it from selling. Why risk future problems when there are so many potential buyers out there?
- After you go through the time, expense, and energy needed to sell your house, buy another, and move, you want to put it behind you. You don’t want to be contacted by the buyer or their attorney three or six months later, dragging you into an expensive dispute over your former home
Disclosures are another form to fill out, but it’s an important one that must be handled correctly. Take your time and when in doubt, disclose. It could save you a lot of hassle and money in the future.
We’re Here to Help
Understanding your obligations when you sell your home is critical to keeping yourself out of legal trouble. If you’re a homeowner and have questions about selling your property, you’re involved in a dispute involving a past disclosure, or you need legal representation, call Anthony Burton at (949) 244-4207 or fill out our online contact form today.
