Unit 3: Mandatory Disclosures

Question 1

A (BLANK) fact is any fact that, if disclosed, could affect the decision of an entity in completing the transaction.

Answer 1

Material

Question 2

Disclosures should be in writing to protect all parties involved.

Question 3

An agent’s fiduciary duties include the following:

Answer 3

• Loyalty
• Obedience
• Confidentiality
• Disclosure
• Accounting

Question 4

When dealing with thrid parties, you are not held to the degree of fiduciary duties to a principal; nevertheless, you have duties of fairness, honesty and disclosure.

Question 5

What is the 3 step process of disclosing agency?

Answer 5

1. Disclose- the licensee must educate the prinicpal about the 3 different types of agents and how they operate.
2. Elect- the agent and principal decide which type of agency will be used (nothing has to be signed yet at this stage)
3. Confirm- confirmation of the type of agency that will be used must be in writing. The agent and the principal(s) must the sign the confirmation.

Question 6

The California Supreme Court case that required a real estate agent to make a reasonable visual
inspection of the property was

Answer 6

Easton vs. Strassburger

Question 7

What form does an agent fill out when doing a reasonable/diligent visual inspection of 1-4 units residential property?

Answer 7

Agent Visual Inspection Disclosure (AVID)

Question 8

A death on the property must be disclosed if the death occured within (HOW LONG?) of the date of an offer. It is considered a material fact and must be disclosed.

Answer 8

3 years

Question 9

Earthquake Safety

California law requires that when selling 1-4 unit residential properties built before 1960, you must disclose that the dwelling has earthquake weaknesses. The Homeowner’s Guide to Earthquake Safety should sign when they receive the booklet.
This earthquake safety disclosure statement is called the Residential Earthquake Hazards Report.

Question 10

Real Estate Transfer Disclosure Statement

Answer 10

The seller is required to provide the buyer a
Real Estate Transfer Disclosure Statement (TDS)
for transactions involving one to four
residential units

Question 11

Natural Hazards Disclosure Statement (NHD) includes:

Answer 11

– Special flood hazard areas
– Areas of potential flooding
– Very high fire hazard zones
– State fire responsibility areas
– Wildland areas that may contain substantial fire
risks and hazards
– Earthquake fault zone as indicated on maps
– Seismic hazard zone

Question 12

Lead-Based Paint Disclosure

Answer 12

– Applies to all residential property built prior to
1978 (Disclosure also required for commercial
property)
– Buyers and tenants must be given a copy of the
booklet Protect Your Family from Lead in Your
Home