What California sellers must disclose
California has some of the strongest home-sale disclosure rules in the country. They didn't come from nowhere. Each one traces back to a real buyer who got hurt, and a court that decided it wasn't fair.
The seller's rule: known, material facts
In 1963, in Lingsch v. Savage, a California court said a seller who knows about facts that materially affect a property's value or desirability, and knows the buyer can't easily discover them, must disclose them.
That's why an "as is" sale doesn't let a seller hide a known problem. As is means "I'm not fixing it." It doesn't mean "I'm allowed to stay quiet about it."
The agent's rule: the house on the hill
In 1976, a buyer named Leticia Easton bought a home with a pool and guest house on an acre in Diablo, in Contra Costa County. Soon after, landslides destroyed the driveway and cracked the walls. The listing agents had seen warning signs, like an uneven guest house floor, but no one ordered a soil study or told her.
In 1984, in Easton v. Strassburger, the court held that a seller's broker must reasonably inspect the property and disclose what that inspection would reveal. California then wrote the rule into law. On homes of one to four units, agents must do a reasonably competent and diligent visual inspection of the accessible areas and report what they see.
Agents aren't engineers, and the duty is visual. A good agent's habit is simple: notice, write it down, and recommend the right expert.
The disclosure form
California combined both rules into the Transfer Disclosure Statement. The seller completes a section about what they know, and the agents each complete a section about their visual inspection. It's the history of these two cases on one form.
Buyer's right: if you receive the disclosure statement after you've already signed an offer, you can cancel within 3 days of hand delivery, or 5 days if it was mailed.
The murder house
In 1983, in Reed v. King, a buyer learned from neighbors that a woman and her four children had been murdered in her new home about ten years earlier. No one had told her. The court said disclosure isn't only about physical defects. A fact is material if it significantly affects the value or desirability of the home, and a home's history can do that.
California later drew a clear line. A death on the property more than three years before the offer doesn't have to be disclosed. And whether an occupant had HIV/AIDS never has to be disclosed.
But no rule ever allows a false answer. If a buyer asks directly, the seller and agents have to answer honestly.
Other disclosures you'll see in South Orange County
- Natural hazards like fire hazard zones and earthquake fault zones, through a natural hazard disclosure report.
- Mello-Roos and special assessments in many newer communities. See our Mello-Roos guide.
- HOA documents, including budgets, rules, and any pending special assessments.
- Lead-based paint disclosures for homes built before 1978.
- A required notice about the state's Megan's Law database of registered sex offenders.
For sellers: disclosure protects you
Most disclosure lawsuits start with a buyer who felt surprised. A thorough, honest disclosure up front is one of the best protections a seller has. When in doubt, disclose it and document it.
Questions about your own situation? Send us a note.
This guide is general information, not legal advice. Disclosure requirements depend on the property and the transaction. Talk with your agent or a real estate attorney about your situation.