With houses in Long Beach, California constantly increasing in value, you’ll find a rush of homebuyers making offers for some of the choicest properties before prices rise even further.
For home sellers, however, it’s not just about sprucing up your property so that it fetches the best price or finding the right buyer for the price you want. Under California law, all home sellers are required to disclose certain information that may put homebuyers’ safety and investment in question.These include structural and location-related issues or concerns.
These disclosures ensure that homebuyers know all about each and every aspect of the home they intend to purchase. The disclosures ensure the veracity of claims made by the seller and the truth of the home’s true condition. It also aims to protect the buyer from paying for a home with liabilities.
Read on to learn more about disclosure forms and other legal responsibilities as a home seller.
Types of disclosure forms
There are numerous types of disclosure forms but the two main ones are the Transfer Disclosure Statement and California Natural Hazard Disclosure Report/Statement. These and others help homebuyers decide how much to offer for a piece of property, or whether to buy it or not.
What is a Transfer Disclosure Statement (TDS)?
According to a booklet published by California’s Department of Real Estate:
“The Real Estate Transfer Disclosure Statement (TDS) describes the condition of a property and, in the case of a sale, must be given to a prospective buyer as soon as practicable and before transfer of title.”
The TDS form for residential properties lists everything that comes with the home, from plumbing to the number of remote controls an automatic garage door opener has, if applicable. Every feature from which every conceivable issuemay arise is contained in the TDS form.
Broadly, thefollowing parts of your home are included in the form:
- Electronics and wiring
On top of your home’s physical condition, California law states that you must mention any deaths that occurred within the home in the last three years – except if the death is HIV or AIDS-related, which is classified as a disability. Do not disclose these special cases because doing so is considered discriminatory.
California Natural Hazard Disclosure (NHD) Report/Statement
The California Natural Hazard Disclosure Report/Statement (NHD) lets you declare if your property is in or near a hazardous area. This includes properties that are in:
- Areas at risk of flooding
- Designated flood hazard areas
- High fire-hazard areas
- Wildland with high risk of fires and other hazards
- Earthquake fault zones
- Seismic hazard zones
Some providers like First American Natural Hazard Disclosures may also ask you to reveal other information about your property’s location. This includes whether or not your home lies in or near an airport, a commercial or industrial area, or an environmental contamination site.
Other important disclosures
Depending on your home’s location and purchase agreement, you may also have to prepare other important disclosure statements. These include those that have any bearing on “special study zones” or properties with active earthquake faults and “purchase-money liens,” or when a buyer takes out a mortgage to secure the property.
As a seller, you’re also obliged to let homebuyers know if there are any registered sex offenders in the area. Help them out by giving them the contact details of local law enforcement in case they want to know more.
Filling out disclosure forms
Even though completing disclosures is a lot of work, providing all the information is necessary to avoid issues later on. Many of the questions in these forms only require “yes/no” answers, but make sure to give complete responses to questions that require a detailed explanation.
If you’re not sure whether to disclose something, the general rule is to just disclose it. This way, you cover all bases to avoid possible liabilities.
Submitting disclosure forms
You can ask your Realtor for the disclosure forms you need. However, you have to fill them out on your own. You can start accomplishing your disclosure form as soon as you list your home.
Provide disclosures to serious buyers as soon as you can to speed up the selling process. It’s important that prospects are informed early on about a home’s true condition so they don’t bail out later on if they find something they’re not comfortable with in the disclosure forms.
Even if you’ve both signed the purchase agreement, the buyer still has the option to cancel the deal if you don’t give the required disclosures before then. If you submit the disclosure forms promptly and in person, buyers have the option to cancel the deal in three days. If the forms are sent by mail, buyers have five days to nix the transaction.
Failure to disclose
Failure to disclose what the law requires will not affect the sale, but it will leave you liable to repairs and damages the buyer suffers as a result of your non-disclosure. It is best to divulge everything about your property and not knowingly leave out or give false information to prospective buyers.
Whether you’re selling commercial real estate or your own home, you can count on me, Michael Thule, to help you out. Give me a call today at 562.299.3583 or send me an email at Michael(at)SoCalTopHomes(dotted)com so we can get your Long Beach or Lakewood, CA property off the market as soon as possible. Alternatively, you can fill out my contact form here.