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What Do You Have to Disclosure?

By law, you must inform the buyer of specific conditions that may affect home living and home value. These are the disclosures you must make to the buyers.

  1. Real Estate Transfer Disclosure Statement
  2. Local Option Real Estate Transfer Disclosure Statement
  3. Natural Hazards Disclosure
  4. Mello-Roos Bonds and Taxes
  5. Ordnance Location
  6. Window Security Bars
  7. Earthquake Guides
  8. Smoke Detector Statement of Compliance
  9. Disclosure Regarding Lead-Based Paint Hazards
  10. California’s Environmental Hazards Pamphlet
  11. Delivery of Structural Pest Control Inspection and Certification Reports
  12. Energy Conservation Retrofit and Thermal Insulation Disclosures
  13. Foreign Investment in Real Property Tax Act
  14. Notice and Disclosure to Buyer of State Tax Withholding on Disposition of California Real Property
  15. Furnishing Controlling Documents and a Financial Statement
  16. Notice Regarding the Advisability of Title Insurance
  17. Certification Regarding Water Heater’s Security Against Earthquake
  18. Data Base - Locations of Registered Sex Offenders

Following are a few important points to review:

Lead Paint

Sellers of properties built prior to 1978 have the following obligations:

  • Provide buyers with a HUD pamphlet entitled "Protect Your Family From Lead in Your Home"
  • Disclose all known lead-based paint and related hazards and provide any available reports
  • Include a standardized warning as an attachment to the contract
  • Complete and sign statements verifying that requirements have been met
  • Retain the signed acknowledgement for 3 years
  • In addition, you must provide the buyers with a 10-day opportunity to test for lead

Natural Hazards

California law requires sellers to disclose, via a "Natural Hazard Disclosure Statement" or NHD, if properties are located in one of six predetermined "natural hazard" zones. (If the property is not within one of these zones, you, of course, have no such obligation.)

The six zones are:

  • A flood hazard zone as designed by the Federal Emergency Management Agency (FEMA)
  • An area of potential flooding after a damn failure (also known as an inundation area)
  • A very high fire hazard zone
  • A wildland fire area, also known as a state fire responsibility area
  • An earthquake fault zone
  • A seismic hazard zone

If an NHD is delivered to the buyer after both parties have signed the Purchase Agreement, the buyer will have three days to rescind the agreement. However, if the buyer received the NHD before they signed the Purchase Agreement, then they cannot use the NHD to rescind.

Mellow Roos Districts

Especially (but not exclusively) if you are selling a home in a newer area, you may be within a Mello-Roos tax district, and you must provide to the buyer a "Notice of Special Tax." If this notice is delivered to the buyer in person, they have three days to rescind their offer. If it’s delivered via U.S. mail, they have five days to decide.

Basically, a "Mello Roos Community Facilities District" is formed by a local government, district, or agency to finance public services and facilities including police and fire departments, ambulance and paramedic services, parks, schools, libraries, museums and cultural facilities.

Condominiums etc.

If you’re selling a condominium, townhouse or other planned development (for purposes of this discussion, we will call them all "condominiums"), there are things you need to know about common areas (such as greenbelts and recreational rooms) and the homeowner’s association.

You will be required to make monthly payments, known as regular assessments, to maintain common areas, as well as special assessments to replace a roof or repair the plumbing, as determined by the homeowner’s association (HOA.)

Condominiums also may have regulations regarding architectural requirements, limitations on pets, and age restrictions (i.e., senior housing). These must be formally disclosed to the buyer during escrow. You may provide this information via the following documents, to the extent that they exist and are available:

  • Declaration of Restrictions: Commonly known as "CC&Rs", or Conditions, Covenants and Restrictions
  • Articles of Incorporation or Articles of Association Bylaws
  • All current financial information and related statements, including operating budget, estimated revenue and expenses, HOA reserves, estimated remaining life of major components (including roofs, plumbing etc.), and regular and special assessments
  • A statement describing the HOA’s policies and practices in enforcing lien rights or other legal remedies for default in payment of its assessments
  • A summary of the HOA’s property, general liability, and earthquake and flood insurance policies
  • On existing HOA’s, a statement describing any restrictions on the basis of age, such as authorized senior citizen housing

Many smaller HOAs will not have all of these documents, but must provide what they do have. We recommend that you review these documents thoroughly, because they will affect you firsthand.

Your home advisor should be able to assist you with compliance with all the disclosure requirements.


DRE# 01715613 / NMLS# 299563
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