Property Disclosures, Explained

1. What are commercial and residential sellers required to disclose to a buyer?

All sellers and their agents, as a general duty owed to a prospective buyer, disclose all known conditions about a property that may adversely affect the desirability or value of the property, calledmaterial facts. [Calif. Civil Code §1102]

Material facts include information about:

• the physical aspects and condition of improvements on the property;
• natural hazards affecting the location of the property;
• environmental hazards on or near the property;
• financial aspects (i.e. the property’s income, expenses and mortgages);
• property title covenants, conditions and restrictions (CC&Rs) regarding use;
• the area surrounding the property’s location; and
• the suitability and zoning of the property for the intended purpose expressed by the buyer.

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