California is a litigious place and as a result Buyers receive tons of disclosures.  On top of that, our state experiences natural hazards including floods, fires, landslides and earthquakes.  Many of the disclosures you receive are basically Buyer beware stuff that every Buyer receives.  All disclosures are signed by both the Buyer and Seller and per the contracts, are supposed to be delivered to the Buyer within 7 days of acceptance of the offer.  Sellers have a legal obligation to disclose anything material that a Buyer would want to know about the property.  This includes any known issues like a leak in the roof but they should also inform you about any improvements and repairs that were made.  If you are buying a property from a bank or in a trustee sale (where the owner is deceased) you may not receive certain disclosures since the person selling the house doesn’t have direct knowledge of the condition of the property.

The Transfer Disclosure Statement (TDS) is the document the Seller fills out regarding the disclosures they are making.  I find that many Sellers are not well advised by their agents and don’t thoroughly disclose the way they should.  This may not be an attempt to hide anything but Sellers often foolishly rush through filling out these documents.  That’s why it’s so important to conduct thorough inspections.  The Seller Property Questionnaire (SPQ) is another document the Seller fills out disclosing more details about the property.   You’ll also receive disclosures regarding lead-based paint if the property was constructed prior to 1978.   The Natural Hazard Disclosure Statement (NHD) is a document you’ll receive which is prepared by an outside company.  It outlines any known hazards in the area including earthquake fault lines, flood zones, potential fire risk and also indicates if you are near industrial areas or military bases.  It’s smart to request a C.L.U.E. report in addition to the NHD – that report informs you about any insurance claims the seller may have made in the past 5 years.   That can be important for various reasons but certain past claims can make obtaining homeowners insurance more difficult.   I do my best to obtain all the disclosure documents PRIOR to inspections.   That way we can point out things to the inspector that the Seller has made us aware of.   For example, if the Seller tells you the bathtub overflowed and they had to make repairs as a result, you would be smart to have a Mold inspection to be certain the water didn’t lead to a mold problem that isn’t clearly visible.

Your agent and the listing agent also disclose what they know about and can visually notice about the property on the Agent Visual Inspection Disclosure (AVID).

Escrow will also send you the City Report (known as the 9A).   There are 2 items on the this report you’ll want to focus on – the Sewer information which tells you if a sewer permit has been issued and the Liens and Assessment Report which addresses 9 additional items relating to assessments, brush abatement etc.   The 9A should be received and reviewed BEFORE closing escrow.

Occasionally, something material happens at the property (such as a leak) after the disclosures have been given to you.  Sellers have an obligation to disclose everything to you until the deal closes and you become the new owner.

You’ll have to sign all of the disclosures.  Your signature doesn’t indicate that you accept what is being disclosed – it provides evidence that you received them and presumably read them – READ THEM CAREFULLY!

Contact Kevin at (310) 200-4916 or email kevindbacher@gmail.com


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