List of required disclosures keeps growing
Originally appeared in Bay Area News Group publications on February 18, 2011
As time goes by, the number and types of disclosures that must be made by a seller and/or his agent continues to expand. Many of these have resulted from lawsuits; all are meant to avoid legal disputes in the purchase of a California home. The California Association of Realtors (C.A.R.) “Sales Disclosure Chart” contains 39 of them for various property types.
When I am called to review a case as an East Bay and Bay Area real estate expert witness, the question arises as to whether the non-disclosed item was a “material fact.” This is defined as information needed to help the buyer decide whether or not to purchase and how much to pay.
Many sellers and a surprising number of agents seem not to understand the importance of full disclosure; this can turn out to be an expensive mistake.
New disclosures
Carbon monoxide detectors. Per the Carbon Monoxide Poisoning Prevention Act of 2010, installation of a carbon monoxide detector device (battery or hard-wired) is mandated as of July 1, 2011 for existing, single-family dwelling units that have fossil fuel-burning appliances, e.g., kitchen range, furnace, water heater, fireplace. All other existing dwelling units must have the device installed by January 1, 2013.
Installation is not a pre-condition of the sale or transfer of the property and it is unclear how the law will be enforced for those who do not install the device by the required date. The number and placement of carbon monoxide detectors is per manufacturer’s directions or local fire department regulations (if more restrictive).
There is a box to check regarding this on the latest C.A.R. Real Estate Transfer Disclosure Statement.
Home Energy Rating System (HERS) booklet. This is an optional disclosure which is incorporated in the revised C.A.R. Combined Hazards Booklet (includes information on earthquake and flood areas).
Other recent disclosures
An Environmental Protection Agency (EPA) lead-paint renovation rule went into effect in 2010 and there are still many homeowners unaware of this regulation. Interior work that affects more than six square feet of lead-based paint or exterior work affecting more than 20 square feet in pre-1978 homes, schools and child-care facilities must be done by an EPA-certified contractor. These contractors are required to follow certain procedures.
Upcoming disclosures
Water Conserving Fixtures. This “applies only to real property built on or before January 1, 1994 containing water fixtures.”
As of January 1, 2014, for single-family homes, state law will require “noncompliant plumbing fixtures” to be replaced with “water-conserving” ones for building alterations or improvements as a condition of receiving a final permit from the local building department.
Beginning January 1, 2017, sellers of single-family homes must disclose in writing that this law exists and whether there are any noncompliant plumbing fixtures in the property. Similar to the carbon monoxide requirement, it is not clear at this point who will be responsible for replacing noncompliant plumbing fixtures and whether there are consequences for failing to follow this law.
The effective disclosure date for properties containing two or more residential units is January 1, 2019.
East Bay Disclosures and Disclaimers Advisory
The Berkeley and Oakland Associations of Realtors jointly issue an extensive, Local Advisory for buyers and sellers that covers Alameda and Contra Costa counties. This document includes distinct, local information that could be critical for sellers to disclose and buyers to understand.
The latest revision includes an explanation of upcoming changes to regulations regarding sewer lines for Oakland, Piedmont and Emeryville. Other highlighted issues involve our older, existing housing stock and how they may or may not conform to “current code, zoning, health and safety” and “setback requirements.”
Considerations such as protected trees, hazardous trees and view ordinances are discussed, as well as creek protection ordinances, fireplaces/wood stoves and underground storage tanks. Additional topics are the tenants-in-common form of ownership, expansive soil and unstable hillsides, high water tables, East Bay climate conditions, permit issues, additions and nonconforming rooms, code compliance and underground utilities.
These and other concerns are noteworthy in our area. Rent control and eviction ordinances are of particular interest. Further, each city and unincorporated area may have regulations that, although similar in intent, differ in specifics. Use of this advisory is recommended for every sale in our region and is especially valuable for out-of-area licensees.
Final Thoughts
Homes are a very important purchase and buyers are entitled to all material facts about the property. If you are a seller, be sure to hire a Realtor who is familiar with your local area, is knowledgeable about disclosures and is able to explain them to you.
As a buyer, you also need an agent who understands the significance of disclosures and will make certain you receive all that are required. In addition, your real estate representative should be savvy enough to use disclosures as a guide to possible further inspections.
It is best for the buyer to know everything about the property that is relevant, helping to avoid expensive and aggravating lawsuits.
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Disclosure Duties Continue Developing