SUMMARY: CH 2: Required Disclosures

Question 1

Transfer disclosure statement

Answer 1

California law requires a seller of residential property to give the buyer a complete transfer disclosure statement regarding the property. The seller must complete the disclosure form and give it to the buyer as soon as possible after the purchase agreement is signed.

Question 2

Recission Rights

Answer 2

A buyer can rescind the purchase agreement if she doesn’t receive a disclosure statement or if she doesn’t like any of the information included int he disclosure statement. The right of rescission lasts or three or five days, depending on how he disclosure statement was delivered. If the buyer rescinds, she is entitled to a full refund to the good faith deposit.

Question 3

Disclosure of Defects

Answer 3

Even if a known defect is not the subject of any question in the transfer disclosure statement, the seller and agent still have the duty to disclose that defect to potential buyers. The listing an cooperating agents must visually inspect the property and disclose an material facts on the transfer disclosure form.

Question 4

Natural hazard and disclosure statement

Answer 4

If a property is located in an area designated as being as increased risk for natural disasters, such as earthquakes, flooding, or forest fires, this must be disclosed on a natural hazard disclosure statement. A listing agent should verify whether a property is in a designated hazard area, using maps issued by the appropriate state or federal authorities.

Question 5

Residential earthquake hazards report

Answer 5

If a house was built before 1960, the seller must give the buyer a pamphlet on earthquake safety. The required pamphlet contains a form in which the seller must disclose to the buyer whether or not the property has been improved in key ways that will minimize earthquake damage.

Question 6

Lead-based paint disclosure

Answer 6

The seller of a home built before 1978 must disclose whether or not there is lead-based paint present on the property. The buyer has 10 days in which to have the property inspected for lead-based paint, during which time she may rescind the purchase contract

Question 7

Mello-Roos Lien disclosure

Answer 7

Many properties are subject to Mello-Roos liens, which secure local special assessment levies or community improvements. If a property is subject to such a lien, the seller must disclose it by giving the buyer a copy of the notice from the appropriate taxing authority