California Law on Mandatory Disclosure

GOMEZ LAW March 28, 2018

State law in California requires the sellers of real estate to disclose all “material facts” concerning the property being sold. In most cases, the seller will complete a form called the Transfer Disclosure Statement (TDS).

The TDS will typically check off an identify any items that are not in operating condition as well as another section in which the seller lists any defects or malfunctions with certain components of the property. The seller must also check a series of yes/no boxes asking whether he or she is aware of any one of 16 listed issues.

It is important to try and be as forthright as possible on a TDS. When a seller fails to accurately disclose a property defect in a real estate transaction, the seller could be liable for several damages.

Filling Out a TDS in California

Most TDS forms are divided into three sections. The first section asks the seller to check off all the items that the subject property has. Items usually listed in this section include appliances such as ranges, ovens, and dishwashers as well as other amenities such as satellite dishes, smoke detectors, and garbage disposals.

The second section concerns significant defects or malfunctions as they relate to walls, ceilings, floors, roofs, windows, doors, foundation, driveways, sidewalks, walls, fences, electrical systems, and plumbing, sewing, and septics.

The third section asks the seller is he or she is aware of any of 16 listed items. The seller either checks yes or no for each question. The TDS also includes a section for an inspection agent’s disclosure and seller and buyer signatures.

Failure to Disclose in California

If a seller fails to disclose or conceals a defect, the buyer may be able to file a lawsuit against the seller for fraudulent misrepresentation. When a court finds that a seller failed to disclose known defects, he or she may be liable to the buyer for various damages.

Damages in such cases may include any combination of the following:

  • Compensatory Damages — Out-of-pocket expenses for the buyer.

  • Punitive Damages — Awarded only in cases in which sellers acted with actual malice and intended to punish the offender and deter him, her, or others from doing so in the future.

  • Rescission — On rare occasion, a buyer may be able to rescind the contract so the seller gets the property back and the buyer gets his or her money back.

Find a Real Estate Attorney in Los Angeles

If you are preparing to finalize any kind of real estate transaction in California, it is in your best interest to make sure you have legal representation when doing so. Gomez & Simone Law represents clients all over the greater Los Angeles area.

Our experienced real estate lawyers can assist you with home inspections and TDS forms as well as all other matters concerning your possible sale or purchase of real estate in California. Our firm will provide a complete evaluation of your case when you call us or contact us online today to schedule a Free Consultation *.