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Disclosure Requirements of California Real Estate Brokers

Real estate agents in California are required to disclose certain information before transferring property. If the real estate broker fails to disclose what is required by law, they can be held liable for actual damages suffered by the buyer. You should consult with an experienced real estate attorney in California if you are unsure of disclosure requirements or have suffered damages because of a lack of disclosure.

Necessary Information to be Disclosed by a Broker in California

Real estate professionals representing sellers are required to ascertain any known defects or hazards on the property. They should also find out about other factors that may affect the sale. These need to be disclosed to the buyer’s representative to determine whether they are still interested in holding negotiations.

Arguably, the duty to disclose known defects and hazards on a property is the most critical one. This information generally affects the buyer’s ultimate offer and the view of the sale. Federal law requires sellers to disclose if the house has lead-based paint or was built before 1978.

These are a few other material defects that real estate brokers in California are required to disclose:

  • Foundation issues and other structural defects
  • Presence of mold
  • Plumbing problems
  • Flood zone
  • Pest or termite issues

Real estate brokers have a fiduciary duty to disclose other pertinent information to both the seller and buyer. This includes factors that may affect the negotiations, sale value, and moving forward. Other aspects that warrant full disclosure include:

  • Offers from potential buyers
  • Seller’s urgency to sell the property
  • Whether either party will move on the offer or price
  • Property value estimate
  • Conflicts of interest

Sale Disclosures by Real Estate Professionals

Real estate professionals are also required to disclose all known hazards and defects on a property. The seller needs to be truthful and their agent should ensure that all known defects and hazards are disclosed to potential buyers.

It’s important to understand that California law doesn’t subject unknown defects to full disclosure requirements. These are the defects that the owner and the broker were unaware of.

However, this situation may warrant liability for non-disclosure if the owner and real estate agent missed something they should have caught had they performed due diligence. It is best to complete an appropriate investigation and disclose any suspected issues. The disclosures made should be in writing to protect everyone involved in case of a dispute.

Potential Damages if a Real Estate Broker Fails to Meet Disclosure Requirements

The buyer or seller may have grounds for filing a lawsuit to recover damages if the real estate broker fails to make full disclosure. This may include:

  • Economic damages: This could include lost money or profits from repairs.
  • Noneconomic damages: These damages are in the form of pain and suffering and usually result from a breach of fiduciary duty.
  • Punitive damages: Such damages are generally available only for serious nondisclosures. They are meant to punish egregious behavior that severely affects the buyer’s health.

It’s crucial that you have all aspects of the sale in writing in case the broker fails to fully disclose the hazards and defects in a particular property. Make sure you consult with an experienced real estate attorney.

You should provide the attorney will all documents and records regarding the dealings. Conversations regarding offers and home disclosure forms are a few essential documents.

Important Real Estate Seller Disclosures You Should Be Aware of in California

These are a few common disclosures that you should be aware of, regardless of whether you are on the seller’s side or the buyer’s:

  • Death: There are superstitions and concerns associated with purchasing a house or a property in which someone has died. Brokers should make adequate disclosures regarding this. Sellers should also disclose any deaths related to violent crimes or because of the property’s condition.
  • Neighborhood Nuisances: Odor or noise from outside the property could cause irritation to the property occupants. Brokers are required to disclose odors, smoke, noises, and other nuisances from industrial, commercial, or military sources that may affect the property occupants. The broker may also require the disclosure of nearby farm operations, landfills, shooting ranges, airports, and other similar nuisances.
  • Hazards: Real estate brokers are required to disclose certain information to the buyer regarding the increased risk of damage from environmental contamination and natural disaster. California requires the disclosure of the presence of toxic or hazardous waste, radon gas, asbestos, and lead-based paint.

These are just a few common examples of defects, hazards, and other factors that a real estate broker or agent may need to disclose during a sale. Speak with an attorney if you think you suffered damages because of non-disclosure.

Our Seasoned California Real Estate Lawyers Can Provide You with Strong Legal Representation

The experienced attorneys at Peterson, Martin & Reynolds LLP can help ensure that all laws are followed regarding disclosure and other aspects if you haven’t yet completed a sale. Our attorneys can also help you file a lawsuit and represent your interests in court if there is an ongoing disclosure dispute.

The law firm of Peterson, Martin & Reynolds takes real estate litigation very seriously and strongly believes in providing every client with dedicated representation. We are happy to provide you with a comprehensive case evaluation. Call us at (415) 849-2564 or reach us online.