California seller disclosure laws protect homebuyers from unexpected losses in value or impairments to the safety and enjoyment of their home. For sellers, however, these requirements can leave you open to legal risks — even years down the line or if you weren’t aware of what you have to disclose. Learn everything you need to know about seller disclosure obligations in California, and discover the best ways to protect yourself from a real estate nondisclosure lawsuit.
Overview: California Real Estate Disclosure Laws
Governed by a sequence of codes beginning with Civil Code Section 1102, real estate disclosure laws require a Transfer Disclosure Statement (TDS) in California when selling most kinds of residential properties. This document reveals “material facts” that could change a buyer’s decision to purchase a home.
The purpose of a TDS is to promote transparency, helping homebuyers become fully educated on a property before making a purchase. This document can also expose sellers to legal risks, though, if their TDS is completed improperly or omits important details.
What Are Sellers Required to Disclose?
To be considered complete, a home seller’s TDS must include comprehensive and thorough information covering a variety of categories:
Physical Condition of Property
Home sellers are required to disclose latent defects in real estate. These defects can include, but are not limited to:
- Damage to roofing
- Foundation issues such as settling
- Electrical or plumbing defects
- HVAC issues
Hazards & Environmental Disclosures
Environmental hazards can exist either inside the home or in the area surrounding it. Common examples inside homes include:
- Lead-based paint
- Asbestos
- Mold
- Poor indoor air quality
Environmental hazards that exist outside or near homes might include:
- Proximity to landfills or other hazardous areas
- Susceptibility to natural disasters like fires, floods, and earthquakes
- Groundwater contamination
Other Issues
Aside from home defects and hazards, other issues that must be disclosed in a TDS include:
- Deaths that have occurred on the property within the last three years
- HOA assessments or disputes
- Frequent neighborhood nuisances like loud noise
- Insurance claims or any litigation related to the property
Common Mistakes in Seller Disclosures
Most home sellers want to complete their TDS documents as thoroughly as possible. However, it’s easy to make simple mistakes when filing this paperwork that can nonetheless cause serious issues later on.
Misunderstanding “Material Facts”
It’s not always clear which kinds of issues are “material facts” and which aren’t. Even if a defect with a home was repaired, for instance, it still needs to be disclosed.
Incomplete Disclosures
Seller misrepresentation in real estate disclosures is often accidental, but it can still be counted against you. It’s important to make TDS documents as complete as possible.
“As-Is” Real Estate Sales
Selling a home “as-is” does not absolve sellers from disclosing material facts about the property.
Legal Consequences of Nondisclosure
In the case of failure to disclose real estate defects in California, homebuyers have a variety of legal mechanisms at their disposal that they can use to file lawsuits against sellers. Breach of contract, negligent representation, and violation of disclosure statutes are all available approaches in these cases.
If these claims are successful, sellers may be held liable for:
- Monetary damages to cover repair costs or reduced property value
- Punitive damages if it’s proven the seller intended to deceive the buyer
- Recission (reverting the sale) in extreme cases
Non-Disclosure Risks Compared
| Category | Examples | Risk | Impact |
| Defects | Issues with roof or foundation | High | Repair costs, delayed discovery lawsuits |
| Repairs & Modifications | Undisclosed repair work | High | Concealment lawsuits |
| Litigation History | Boundary disputes, HOA fines | High | Fraud lawsuits |
| Hazards | Asbestos, lead paint, mold | Medium | Health claims with potential extended liability |
| Neighborhood Concerns | Noise, odors, traffic | Medium | Desirability & emotional distress claims |
Examples: Issues with roof or foundation
Risk: High
Impact: Repair costs, delayed discovery lawsuits
Examples: Undisclosed repair work
Risk: High
Impact: Concealment lawsuits
Examples: Boundary disputes, HOA fines
Risk: High
Impact: Fraud lawsuits
Examples: Asbestos, lead paint, mold
Risk: Medium
Impact: Health claims with potential extended liability
Examples: Noise, odors, traffic
Risk: Medium
Impact: Desirability & emotional distress claims
Statute of Limitations for Seller Disclosures
Generally, the statute of limitations for real estate in California in the event of post-closing real estate disputes is two years. This window is extended to three years after the date of discovery if fraud is uncovered. If it wasn’t possible to discover defects at an earlier date, this statute of limitations can be extended even further, allowing California seller disclosure lawsuits to be filed many years after closing.
How to Protect Yourself as a Seller
Seller disclosure laws make it inherently risky to sell a home in California. There are ways, however, that you can reduce your potential risks as a seller.
Over-Disclose When Possible
Disclose potential issues with the home even if you aren’t sure it’s necessary. By doing so, you cover all your bases and avoid potential accusations of fraud.
Proper Documentation
Maintain thorough records relating to the property, including inspection reports, repair receipts, warranties, and communication with real estate agents and the buyer.
Professional Legal Assistance
Ultimately, the best way to avoid potential litigation risks is to hire a real estate lawyer to help you file your TDS. The process of providing a seller disclosure is complex and filled with opportunities for mistakes.
Rely on Marinaccio Law for Help with California Seller Disclosure Lawsuits
At Marinaccio Law, we’re familiar with every conceivable aspect of seller disclosure laws in California and how they can affect you even long after selling your home. Whether you’re currently in the process of selling your home and need help filing your TDS or you’re facing a lawsuit over a home you’ve sold in the past, we’re here to help. Our expert legal guidance will help you achieve the most favorable outcome regardless of the circumstances.
FAQs
1.) Can I be sued if I genuinely forgot about a problem?
Yes, you can still be sued over a problem with a home you sold even if you forgot about it. There is a difference, however, between seller fraud vs. negligence in real estate law in California. If you should have known about a problem with your home as part of your role as a homeowner, you might be found negligent if you didn’t report it. That’s a far cry from fraud, however, which is when you intentionally withhold material facts that you either knew of or should have known about.
2.) Does selling a home “as-is” protect me from lawsuits?
No, selling a home “as-is” does not protect you from California seller disclosure lawsuits. Even if you sell your home “as-is,” you’re still required by law to disclose any material facts about the property that might affect its value or desirability. Failure to do so could leave you liable for fraud.
3.) What if my real estate agent told me not to disclose something?
Seller misrepresentation in real estate law is not absolved because you acted on someone else’s advice, even your real estate agent’s. If it can be proven that your agent directed you not to disclose a material fact about your home, they could be held liable for damages alongside you.
4.) Can buyers sue years later for defects they discovered after moving in?
Yes, California law allows homebuyers to sue sellers long after they moved in if the issue could not have been discovered at an earlier date. If foundation cracks were repaired and not disclosed but then recur later in the home’s lifetime, for instance, buyers may be able to sue even years after closing.
5.) What if the buyer had their own inspection?
You can still be held liable for undisclosed issues with a property even if the seller ordered their own inspection of the home. Inspections uncover current issues with a home, but they do not provide information on past repairs and many potential hazards.