Sellers of California real estate have duties under the law to provide full disclosure about the condition of the property, the natural hazards associated with its land and location, the environmental hazards and neighborhood influences on the value or desirability of the property. In addition, sellers must reasonably accommodate buyers in their rights to inspect the property, having all utilities operating.
Sellers liabilities to their buyers continue if they fail to make disclosures of known property defects; thus it is imperative that they provide full disclosure. In addition to information directly from the seller, many other disclosures are made by third parties. These are paid for by either the seller or buyer and include the natural hazards report, often a pest control inspection report, and specific city reports and inspection requirements.
Requirements Imposed by Municipalities
Cities impose varying demands on sellers. These include site inspections, building report summaries, or simply tax on the selling price.
As an example, the City of Redondo Beach charges $2.20 per $1,000 of the selling price and requires a building permit summary to be acknowledged by the buyer as a condition of sale.
The City of Rolling Hills Estates requires and on-site inspection unless waived by the buyer.
Palos Verdes Estates requires the seller to obtain and the buyer to acknowledge a building report summary. In addition, the Verdes Homes Association strongly recommends that buyers require sellers to provide a Letter of Completion and Compliance prior to the conclusion of a sale. This would alert buyers of anything done to the exterior of the property without approval.
The City of Los Angeles requires a transfer tax of $4.50 per $1,000 of the selling price above the recorded mortgage indebtedness of the seller. In addition an affidavit must be deposited by the seller or his approved representative that required water-saving devices have been installed, gas earthquake shutoff valves are installed, and proper shatterproofing is provided as required on windows.
Thus, with such variations, it is essential that the specific requirements of each municipality be investigated.
Sellers' Responsibilities
Specific information is provided in the comprehensive purchase agreement that is commonly used in California real estate sales. This purchase agreement was prepared by the legal staff of the California Association of Realtors (CAR), incorporating protections for both buyers and sellers and meeting requirements of real estate law.
A full complement of forms provide for all required disclosures and other transaction documents. An overview of this material is provided in below in this section of the website.