Chapter 5: Real Property Disclosures and Advisories

Question 1

What is the importance of the Disclosure Information Advisory (DIA) form to sellers?

Answer 1

CAR® has created this form to give to sellers prior to
completing the required disclosure forms.

Also The DIA advises sellers of the importance of disclosing
what they know affecting the value and desirability of
the property, and taking the time to be thorough and
complete when making required statutory and
contractual disclosures.

Question 2

What information does the Statewide Buyer and Seller Advisory (SBSA) cover?

Answer 2

•  Buyer’s Rights and Duties
•  Seller’s Rights and Duties
•  Broker Rights and Duties
•  Investigation of Physical Conditions
•  Property Use and Ownership
•  Off-Site and Neighborhood Conditions
•  Legal Requirements
•  Contract Related Issues and Terms
•  Other Factors Affecting Property
•  Local Disclosures and Advisories

Question 3

ADVISABILITY OF TITLE INSURANCE DISCLOSURE

Summary of Disclosures; this is not all of them

Answer 3

required in a escrow transaction for the
purchase/exchange of real property where a policy
of title insurance will NOT be issued to the buyer

Question 4

AGENCY DISCLOSURE (AD)

Summary of Disclosures; this is not all of them

Answer 4

a requirement that agents who act for both buyers or sellers must
disclose who they are working for

Question 5

AIRPORT IN VICINITY (NHD)

Summary of Disclosures; this is not all of them

Answer 5

a NHD expert must determine if the property if located within an
“airport influence area”

Question 6

BROKER’S STATUTORY DUTY TO INSPECT
PROPERTY (AVID)

Summary of Disclosures; this is not all of them

Answer 6

1 to 4 units, a real estate licensee
must conduct a reasonably competent and diligent
visual inspection of the property

Question 7

CARBON MONOXIDE DETECTOR DISCLOSURE
AND COMPLIANCE DISCLOSURE

Answer 7

requires a carbon monoxide
detector device (battery or hard-wired) to be
installed in all dwelling units

Question 8

COMMERICAL PROPERTY OWNER’S GUIDE TO
EARTHQUAKE SAFETY DISCLOSURE

Answer 8

mandatory delivery in the sale, transfer, or exchange of any real property,
manufactured home or mobile home located within a
county or city

Question 9

DISCLOSURE OF DEATH (IN LAST 3 YEARS)

Answer 9

any death which has occurred within a 3-year period should be
disclosed if deemed to be “material”

Question 10

FARM OR RANCH PROXIMITY DISCLOSURE (NHD)

Answer 10

a NHD expert must determine if the property is located
within one mile of real property designated as farm
or ranch land on a Geographic Information
System (GIS)map*

Question 11

FHA/HUD INSPECTION NOTICE DISCLOSURE

Answer 11

-sale of HUD-owned residential real property of 1 to 4 units or
properties which involve FHA loans

Question 12

FEDERAL WITHHOLDING (FIRPTA) and
CALFORNIA WITHHOLDING TAX

Answer 12

•  Federal Withholding – for all sales to a “foreign person” buyers
  must withhold 10% of the gross sales price and send it to the IRS
•  California Withholding – buyers must withhold 3 1/3 % of the
  gross sales price on any sale of real property interests and send it to the FTB

Question 13

.FLOOD DISASTER INSURANCE REQUIREMENTS DISCLOSURE

Answer 13

on any transfer of personal, residential or
commercial property where the owner received
federal flood disaster assistance conditioned on the
owner subsequently obtaining and maintain flood
insurance

Question 14

GAS AND HAZARDOUS LIQUID TRANSMISSION
PIPELINE NOTICE

Answer 14

required of every contract for
sale of real property, this notice informs the buyer
that information about the general location of these
pipelines is available

Question 15

GROUNDWATER BASIN COMPREHENSIVE
ADJUDICATION NOTICE

Answer 15

it is advisable to use
this notice and disclose it as a material fact

Question 16

HOME ENERGY RATING SYSTEM (HERS)
BOOKLET

Answer 16

an optional disclosure which can be
delivered to the transferee

Question 17

HOMEOWNER’S GUIDE TO EARTHQUAKE
SAFETY BOOKLET

Answer 17

any structural deficiencies must be disclosed plus this booklet given to the
transferee from the transferor

Question 18

INDUSTRIAL USE ZONE LOCATION

Answer 18

the seller of real property must disclose “actual knowledge”
that the property is affected by or zoned to allow an
industrial use of property as soon as possible before
transfer of title

Question 19

LEAD-BASED PAINT PAMPHLET

Answer 19

the
seller/lessor must provide the buyer/lessee with a
lead hazard information pamphlet and disclose any
knowledge of lead-based paint to the buyer/lessee

Question 20

MATERIAL FACTS

Answer 20

a seller or real estate agent involved in the transaction of real property must
disclose any known material facts that affect the
value or desirability of the property

Question 21

MEGAN’S LAW DISCLOSURE

Answer 21

every lease or rental agreement and every sales contract is required to give notice of the existence of public access to database information
regarding sex offenders

Question 22

MELLO-ROOS, 1915 BOND ACT ASSESSEMENTS, AND VOLUNTARY
CONTRACTUAL ASSESSMENT

Answer 22

the transferor must make a good faith effort to obtain a disclosure notice
concerning the special tax or assessment for each local agency
that levies a special tax or assessment and deliver this notice
to the prospective transferee

Question 23

METH LAB CLEAN-UP ORDER DISCLOSURE

Answer 23

in the event that toxic contamination by an illegal controlled
substance has occurred on a property and upon
receipt of a clean-up order from the Department of
Toxic Substances Control

Question 24

MILITARY ORDNANCE LOCATION DISCLOSURE

Answer 24

–disclosure is required when the transferor has actual knowledge
that a former military ordnance location is within
one mile of the property

Question 25

MINING OPERATION (NHD)

Answer 25

– a NHD expert must determine if the property is located within one
mile of a mine operation as reported by the Office of
Mine Reclamation map

Question 26

MOLD DISCLOSURE

Answer 26

–the TDS has been modified to include the
word “MOLD” and the transferor must disclose any
actual knowledge of toxic mold on the property

Question 27

PEST CONTROL INSPECTION REPORT AND
CERTIFICATION

Answer 27

the transferor must deliver to
the transferee a copy of a structural pest control
inspection report and certification as soon as
practical if a report is made and, if so, any
remediation work is required

Question 28

PRIVATE TRANSFER FEE

Answer 28

-if a property being transferred is subject to a transfer fee, the
transferor must provide a transfer tax disclosure
statement

Question 29

RESIDENTIAL ENVIRONMENT HAZARDS
BOOKLET

Answer 29

a transferor can voluntarily give a
consumer information booklet to the transferee

Question 30

SEISMIC HAZARD ZONES (NHD)

Answer 30

-a seller or the seller’s agent must disclose to the buyer the fact
that the property is in a seismic hazard zone

Question 31

SMOKE ALARMS MUST BE IN COMPLIANCE DISCLOSURE

Answer 31

-all homes must have a smoke alarm in each room
designed for sleeping

Question 32

.SPECIAL FLOOD HAZARD AREA (NHD)

Answer 32

the seller or the seller’s agent must disclose to the
buyers if the property is in the Special Flood Hazard
Area

Question 33

STATE RESPONSIBILITY ARE (NHD)

Answer 33

– the seller must disclose to the buyer the fact that the property
is located in a fire hazard area, the risk of fire, state imposed additional duties such as maintaining fire
breaks and the fact that the state may not provide
fire protection services

Question 34

SUPPLEMENTAL PROPERTY TAX NOTICE

Answer 34

– the seller must deliver to the buyer the statutory notice
of any supplemental taxes

Question 35

SUBDIVIDED LANDS LAW DISCLOSURE

Answer 35

– affects the sale, lease, or financing of new developments consisting
of 5 or more lots, parcels, or interests or if the sale
is to 5 or more people

Question 36

TRANSFER DISCLOSURE STATEMENT (TDS)

Answer 36

–the property disclosure statement, required by law,
in most residential sales transactions in California

Question 37

VERY HIGH FIRE HAZARD SEVERITY ZONE
(NHD)

Answer 37

-the seller must disclose the fact that the
property is located within this zone and whether it is
subject to the requirements of Government Code
Section 51182

Question 38

WATER CONSERVING FIXTURES DISCLOSURE

Answer 38

– applies to properties built before 1994, the seller
must disclose in writing to any prospective buyer
that the law requires that noncompliant plumbing
fixtures must be replaced with water conserving
plumbing fixtures

Question 39

WATER HEATER BRACING STATEMENT OF
COMPLIANCE

Answer 39

–all owners of new or replacement
water heaters must brace, anchor, or strap water
heaters to resist falling due to earthquake motion