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If you are a real estate agent or a Realtor® and you are working with a Transaction Coordinator, you may come across situations where you are discussing home sellers disclosures, such as the Transfer Disclosure Statement (TDS), Seller Property Questionnaire (SPQ), or the Supplemental Statutory Disclosure (SSD).

The other day one of the agents who uses our service asked whether previous plumbing repairs are a material fact. While each agent should always speak with his or her own broker and sellers should always seek the advice of an attorney, it is important to always disclose anything you know. One possible oversight could end up with everyone in mediation, arbitration, or court.

What Is a Seller Disclosure?

In general, a seller is required to disclose any material fact that could influence whether a buyer would want to purchase a property. For example, if a seller had repaired mold or knew of some underlying problem with the roof, these items should be disclosed to the buyer—as they might influence the buying decision. Agents also need to disclose anything that they know about the property. So, if an agent has sold a property more than once or has some old reports of any sort on the property, those should be conveyed to the new buyers during the escrow process.

Where should sellers disclose materials facts?

If you are a residential agent in California and you are working with a California Transaction Coordinator, then you may note that the Residential Purchase Agreement (RPA-CA) does provide you with the option of requesting from the seller either the SPQ or the SSD. Disclosures should also be made on the TDS.

According to the California Association of Realtors® Summary Disclosure Chart, the SSD or the SPQ should be used to disclose material facts, a Meth-Lab Clean-up Order, and a Military Ordnance Location.

• With respect to materials facts, the document states, “A seller (transferor) or real estate agent involved in the transaction must disclose any known material facts that affect the value or desirability or the property. Whether or not something is deemed material is determined by case law.”

• With respect to the Meth Lab Clean-up Order, the document states, “In the event that toxic contamination by an illegal controlled substance has occurred on a property and upon receipt of a clean-up order from the Dept. of Toxic Substances Control (DTSC) or a Local Health Officer, the transferor must provide a copy of this order to the transferee…”

• With respect to Military Ordnance Location, the document states, “Disclosure is required when the transferor/lessor has actual knowledge that a former military ordnance location (military training grounds which may contain explosives) is within one mile of the property. The transferor/lessor must disclose in writing to the transferee/lessee, that these former federal or state military ordnance locations may contain potentially explosive munitions…”

For additional information about the TDS, SPQ and the SSD, review the Sales Disclosure Chart provided by the California Association of Realtors® or contact us at Transaction 911.