California has some of the most detailed seller disclosure requirements in the country, and getting them right protects you as much as it protects the buyer. Here’s what’s actually required.
The Transfer Disclosure Statement, Explained
The Transfer Disclosure Statement, commonly called the TDS, is a standardized form required in most residential sales in California where the seller discloses known facts about the property’s condition, including issues with the roof, plumbing, electrical, appliances, and structural elements. It’s filled out based on what you actually know as the owner, not a guess or a professional inspection, though it should reflect anything you’re aware of even if you never had it formally assessed. The point of the TDS isn’t to make the home look perfect. It’s to create an accurate, documented record of what you know, which is exactly what protects you if a dispute comes up after closing.
Do I Need to Disclose Foundation Issues?
Yes. Known material defects, and a foundation issue is a clear example, must be disclosed regardless of whether you’ve had it repaired, plan to price around it, or believe it’s minor. The standard isn’t whether you think it’s a big deal. It’s whether you know about it. Sellers sometimes assume that if a defect isn’t visible or hasn’t caused a recent problem, it doesn’t need mentioning, but California’s disclosure standard is based on the seller’s actual knowledge, not on how obvious the issue currently appears. If you’re unsure whether something rises to the level of a disclosable defect, that’s a conversation to have with your agent or a real estate attorney before you sign the TDS, not a judgment call to make alone.
Beyond the TDS: Natural Hazard Disclosures
Separately from the TDS, California requires a Natural Hazard Disclosure Statement, which discloses whether the property sits in designated zones for flood, fire, earthquake fault lines, or other state-mapped hazards. This is typically prepared by a third-party natural hazard disclosure company your agent or escrow office coordinates, and it’s based on public mapping data rather than your personal knowledge of the property.
Selling a Home With an HOA Violation
If your property is part of an HOA and there’s an open violation, an unapproved renovation, an unresolved complaint, unpaid dues, or anything similar, it generally needs to be disclosed, and buyers will typically see it anyway once HOA documents are provided during escrow. Trying to resolve or hide a violation instead of disclosing it upfront tends to backfire, since it surfaces in the HOA’s documents regardless and then looks like you were withholding information. If you have an open HOA issue, your best move is usually to either resolve it before listing or disclose it clearly and let the buyer factor it into their decision.
What Happens If You Don’t Disclose Something You Knew About
Failing to disclose a known material issue doesn’t just risk the buyer’s trust. It creates real legal exposure, since a buyer who discovers an undisclosed known defect after closing can pursue a claim against you as the seller. This is one of the areas where getting professional guidance before you sign anything is worth far more than the time it takes, since the disclosure forms you sign become the record everyone refers back to if a dispute ever arises.
When in Doubt, Disclose It
The safest and most common practical guidance is to over-disclose rather than under-disclose. Nearly every experienced agent will tell you the same thing: an aggressive disclosure approach protects you far more than it costs you, since disclosed issues get priced into an offer upfront, while undisclosed issues that surface later can unravel a deal or lead to a claim well after you’ve moved on.
If you have questions about what needs to be disclosed for your specific property, get in touch and Efrat can walk you through it before you list.