Buying a home is one of the largest financial commitments that many people make throughout their lives. It is essential that both the buyer and the seller are well informed about all aspects of the property in question. In this context, the “Transfer Disclosure Statement” (TDS) plays a fundamental role in the process of residential real estate transactions in California.

What is the “Transfer Disclosure Statement”?

The TDS is a document that details the condition and characteristics of a residential property that is being sold. Its main objective is to provide buyers with detailed information about the property before finalizing the purchase, thus ensuring that they are fully informed about any defects, problems or particular features of the home.

The TDS is a comprehensive document that residential sellers must provide to buyers, detailing the features, conditions and any known problems of the property for sale. It is specified in the Civil Code in section §1102.6.

The Seller's Obligation

Not all property sellers are required to provide a TDS. However, for residential properties, it is a fundamental requirement. Specifically, those sellers of 1-4 unit residential properties, including manufactured homes, must use the statutory form which is provided in the Civil Code (CC 1102.6). This ensures consistency in the information provided to buyers and ensures that all sellers meet a minimum disclosure standard. It is important to highlight that this obligation cannot be waived by any of the parties involved (Ref 179; CC 1102-1102.17).

Inalienable Right of the Buyer

It is crucial to understand that the buyer's right to receive TDS is inalienable. In other words, cannot be waived. This underlines the importance that the law places on full and transparent disclosure in real estate transactions, thus protecting the rights and interests of the buyer.

If a seller fails to provide TDS before the execution of a purchase offer, the buyer has the right to rescind the offer. This revocation period is three days after delivery of TDS in person or five days if sent by mail (per CC 1102.3(b)).

Important Update

Starting January 1, 2021, there has been a significant addition to the TDS. If a home was built before January 1, 2010 and is located in an area identified as high fire danger, the TDS must include a specific notice to that effect (per CC 1102f(a)). This update highlights the importance of staying informed about current real estate regulations.

Conclusion

Transparency and integrity are essential in any real estate transaction. The obligation to provide a “Transfer Disclosure Statement” reinforces these principles, ensuring that buyers are fully informed and that sellers meet their disclosure responsibilities. In the ever-complicated world of real estate transactions, tools like TDS ensure that both parties move forward with confidence and with all the information necessary to make informed decisions.