The real estate market is hot again. New construction and resale home prices are setting records. Buyers and sellers are transacting deals with high dollars, emotions and risk. Many disputes arise from residential real estate disclosures. California law places obligations on both sellers and buyers when it comes to real estate disclosures.
We advise our clients to hire a qualified, competent, licensed real estate broker for every transaction. Good brokers reduce complexity and risk for both sellers and buyers. They also provide great assistance in complying with disclosure law.
Sellers must disclose to the buyer all known material facts affecting the value or desirability of the property. In California, sellers of residential property are required by law to prepare and submit to buyers a form known as the Real Estate Transfer Disclosure Statement (TDS). This form includes many questions about the condition of the property and other matters affecting its value or desirability. Note: sellers must disclosure all known material facts even if selling a property “as is”. An “as is” clause in a purchase contract does not excuse the duty to disclose known material facts.
In California, buyers have a duty to investigate disclosed matters or those items within the buyer’s attention or observation. A buyer is responsible to review and understand the contents of the TDS regardless of whether the buyer actually reads it. The courts are not sympathetic of buyers who don’t read a TDS. A buyer must use reasonable care when purchasing a home. For example, a buyer that fails to properly inspect a property prior to purchase may assume the risk of observable defects. For that reason, most buyers hire a trained property inspector.
The agents and brokers involved in real estate transactions also have legal responsibilities regarding disclosures. California statutory and case law states that brokers (and agents they supervise) have a fiduciary duty to learn and disclose facts material to the property’s value and desirability. All real estate transactions now require brokers/agents to complete the Agent Visual Inspection Disclosure (AVID) form.
Buying or selling a home can be stressful and complicated. Following the direction of a good real estate broker can help make the process easier. A good deal is one where both sides are satisfied and no disputes arise after closing. Both seller and buyers can benefit from, a chart published by the California Realtor’s Association on real estate disclosures. If you have any questions regarding real estate disclosure duties or other real estate legal questions, please contact us.
Michael H. Ritter is an attorney with Clear Sky Law Group, P.C. and a licensed real estate broker. He can be reached at email@example.com or (760) 722-6582.