Practice of Real Estate and Disclosures
What the seller must disclose
A seller of a one-to-four unit residential property must deliver a Transfer Disclosure Statement (TDS) disclosing known defects and conditions affecting value. Both the listing and selling agents complete a visual inspection section, noting observable defects; agents need not inspect inaccessible areas and need not verify what the seller says. Natural Hazard Disclosure covers flood, fire, seismic fault, and landslide zones; Mello-Roos and 1915 Act assessment districts must also be disclosed, as must the Megan's Law database notice. Pre-1978 housing triggers the federal lead-based paint pamphlet and a ten-day inspection right. A death on the property within three years must be disclosed only if the buyer asks - never the manner of death, and never an occupant's HIV/AIDS status.
The traps
"As-is" does not cancel the duty to disclose; it only limits repair obligations. Nondisclosure of a known defect supports fraud and negligent misrepresentation claims. Know the rescission clock: a buyer may terminate within three days after personal delivery of the TDS, or five days if mailed. Remember the exempt transfers: foreclosure sales, probate and court orders, transfers between co-owners, and the first sale of new construction.
Rule of thumb: if the seller knows it and it would influence a reasonable buyer's decision, put it in writing. Disclosure never creates a defect; silence creates liability.