The Key Role of the Real Estate Transfer Statement in Real Estate Transactions


In the world of real estate transactions, property exchange is a complex process that requires accurate documentation and transparent disclosure. A fundamental element in this process is the “Real Estate Transfer Statement” (Declaration of Transfer of Real Estate). In this article, we explore in detail the purpose and relevance of this declaration in the context of real estate transactions, shedding light on how this legal tool protects buyers and sellers in California.

The 'Real Estate Transfer Statement': What is it and why is it important?

The Real Estate Transfer Statement, also known as TDS, is a form required by California law to provide essential information about the physical and legal condition of a property for sale. This document is vital to ensure that buyers have a complete understanding of the property they are purchasing and to allow sellers to meet their disclosure obligations.

In the complex world of real estate transactions, transparent and accurate disclosure is essential for everyone involved. One of the most essential aspects of this process is the “Transfer Disclosure Statement”, known as TDS. In this article, we explore in detail the relevance of TDS in real estate transactions in California, who is required to provide it, and how to comply with this legal obligation.

The 'Transfer Disclosure Statement' (TDS): One of the Most Important Disclosures

The “Transfer Disclosure Statement” (TDS) is one of the most important and recognized disclosure documents in the real estate field. Designed to provide vital information to buyers and sellers, the TDS plays an essential role in the property transfer process.

Who Must Provide a TDS?

Generally, sellers (or transferors) of real estate consisting of four or fewer housing units are required to provide a TDS. Additionally, a “Mobilehome TDS” (MHTDS) is required on the sale of mobile and manufactured homes used as residences. However, certain sellers in these types of transactions are exempt from the TDS requirement (see “Exemptions from Transfer Disclosure Statement” below).

Importantly, a seller must provide TDS even when selling a property without the intermediation of an agent, such as in a “for sale by owner” transaction. Additionally, TDS must be provided on sales of new residential properties that are not part of a subdivision, such as a new home or a new four-unit building under construction on one lot.

TDS Law Compliance: How Can Sellers Comply?

The TDS and MHTDS are statutorily defined forms, meaning they must contain the exact language provided in the legislation. This language is available on the California Association of Realtors (CAR) Forms TDS (for real properties) and MHTDS (for manufactured and mobile homes).

Time of Providing TDS

From a legal point of view, the TDS must be delivered to the buyer as soon as practicable before the transfer of title. However, the CAR Residential Purchase Contract (Form RPA) states that all disclosures, including the TDS, must be provided within 7 days of acceptance of the contract.

It is essential to note that if the buyer receives the TDS after executing the purchase offer, he will have a period of three or five days to cancel the transaction, even if the contingencies have been removed. Therefore, to have a truly “contingency-free” contract, the buyer must receive the TDS before the execution of the purchase contract.

Consequences of Not Providing a TDS

The law provides that if the seller willfully or negligently violates any of its provisions, the seller will be liable to the buyer for any actual damages resulting from such violation. If the licensee responsible for providing the disclosure statement is unable to obtain it, the licensee must inform the purchaser in writing of his or her right to receive the statement. Additionally, California courts have ruled that if the seller does not provide a TDS, the buyer can cancel the purchase contract before closing.

NOTE: TDS requirement cannot be waived by the buyer.

Detailed Content

The TDS covers a wide range of aspects relevant to a real estate transaction, including, but not limited to:

  1. Physicals conditions: Describes the physical condition of the property, such as the structure, electrical system, plumbing, roof, and other major components.
  2. Known Defects: Reveals any known defects in the property that could affect its value or habitability, from structural problems to previous flooding.
  3. Renewal History: Reports any major renovations or improvements made to the property and whether appropriate permits were obtained.
  4. Zoning and Restrictions: Detail the zoning of the property and any legal or regulatory restrictions that may affect its use.
  5. Litigation and Legal Issues: Disclose any past or current litigation related to the property, as well as legal issues that may impact it.
  6. Natural Phenomena: Reports location in natural hazard zones, such as floods, earthquakes, and forest fires.

Legal Compliance and Protection

The TDS not only provides valuable information, but also meets legal disclosure requirements in California. Both buyers and sellers benefit from this tool as it protects both parties by ensuring accurate and relevant information is shared.

In the context of real estate transactions in California, the Transfer Disclosure Statement (TDS) is an essential document for providing crucial information to buyers. However, there are certain circumstances in which TDS is not required. In this article, we explore the key exemptions from the law governing TDS and when it does not apply in the property transfer process.

When is TDS Required?

TDS is required in most residential transactions in California. However, there are specific situations where it is not necessary to provide a TDS. The most relevant exemptions in the law are detailed below:

Exemptions of the Law Requiring a TDS

  1. Transactions with Public Report: Transfers requiring a public report under § 11018.1 of the Business and Professions Code (new home sales in a subdivision containing 5 or more units) and transfers under § 11010.8 of the Business and Professions Code where a public report is not required ( sale of a new home in a subdivision of 4 or fewer units, if it is located entirely within the city limits and meets local requirements).
  2. Transfers by Court Order: Court-ordered transfers (such as court-ordered probate sales, sales by a bankruptcy trustee, writ of execution, condemnation, and transfers resulting from a decree of specific performance).
  3. Foreclosure Transfers: Foreclosure transfers (including a deed in lieu of foreclosure and a transfer by a beneficiary who acquired the property by foreclosure or deed in lieu of foreclosure).
  4. Transfers by a Trustee: Transfers by a fiduciary in the course of administering the property of a decedent, guardianship, conservatorship, or trust.
  5. Transfers between Co-owners: Transfers from one co-owner to one or more other co-owners.
  6. Family Transfers: Transfers to a spouse or to a child, grandchild, parent, grandparent, or other direct ancestor or descendant.
  7. Marriage Transfers: Transfers between spouses in connection with a dissolution of marriage or similar proceeding.
  8. Transfers by the State: Transfers by the State Controller in accordance with the Unclaimed Property Law.
  9. Transfers for Non-Payment of Property Taxes: Transfers or exchanges due to nonpayment of property taxes.
  10. Transfers to or from Government Entities: Transfers or exchanges to or from any government entity.

While the “Transfer Disclosure Statement” (TDS) is a vital tool to provide transparency in real estate transactions in California, it is important to understand that there are exceptions in which its presentation is not required. By knowing these exemptions, buyers, sellers and real estate agents can have a more complete understanding of when TDS is necessary and when it is not, ensuring a more informed property transfer process compliant with state regulations.


In the real estate transfer process in California, the “Real Estate Transfer Statement” emerges as an indispensable tool. By disclosing detailed property information, this document promotes transparency, informed decision-making, and protection of the interests of all involved. From physical conditions to legal aspects, TDS is a crucial step in ensuring fair and successful real estate transactions.

The Transfer Disclosure Statement (TDS) is an essential part of real estate transactions in California. By understanding who is required to provide a TDS, when to do so, and the consequences of failing to comply with this obligation, both buyers and sellers can engage in the property transfer process in an informed and legally compliant manner. The TDS not only protects the interests of all parties involved but also promotes transparency and fairness in the real estate market.

Legal and Tax Disclaimer

Please be advised that the content presented in this blog is for informational purposes only and should not be construed as legal or tax advice. The articles and information provided here are written from the perspective of a real estate agent affiliated with Keller Williams, and do not represent legal or tax counsel.

As the author, I am a licensed real estate professional under Keller Williams, holding Brokerage DRE License Number: #02197031. However, it is important to note that my expertise is in the field of real estate, and not in legal or tax matters. The insights and opinions shared on this blog are based on my experiences and knowledge in the real estate industry and should be treated as general guidance rather than definitive legal or tax advice.

For specific legal or tax concerns relating to any real estate transactions or investments, readers are strongly encouraged to consult with a qualified attorney or tax advisor who can provide tailored advice based on your individual circumstances and the latest legal and regulatory requirements.

The information on this blog is provided "as is" without warranty of any kind, and I, along with Keller Williams and its affiliates, disclaim all liability for any loss, damage, or misunderstanding arising from reliance on the information contained herein.

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