I’m selling my house. Do I have to Disclose that?

Joe Dickerson Group
Joe Dickerson Group
Published on May 29, 2019

In California, the answer is probably yes. Each state has its own disclosure requirements, and it turns out there’s still one out there–Alabama, I’m looking at you–that has little to no seller duty to disclose. I know from personal experience; Ask me for an educational story about investing out-of-state.

When I’m listing a property in California, if a seller asks me if they need to disclose something, usually the best advice I can give is: if you have to ask, yes you should probably disclose. We live in a litigious environment, and experts like Broker Resource Law Group believe the people buying homes now will be the most litigious buyers ever to enter the market. That potentially means more lawsuits naming sellers.

How do I protect myself as a seller?

As you’re hiring a real estate agent, make sure that person has a firm grasp of disclosure requirements and how to lower the chances that you’ll end up in court after the sale. And then, when you’re filling out statutory disclosures, be as complete as possible. You’ll notice that many of the questions are phrased, “Are you aware of…”. My (not legal) advice is that if you should be aware of the item in question, spend a little time to obtain the relevant information.

Brian O’Grady, an attorney in the Bay Area, says a “seller cannot be found liable if the seller did not know about the defect – so long as a reasonable inspection would not have revealed the defect.”

Brian references California Civil Code Section 1102.4:(a): Neither the transferor nor any listing or selling agent shall be liable for any error, inaccuracy, or omission of any information delivered pursuant to this article if the error, inaccuracy, or omission was not within the personal knowledge of the transferor or that listing or selling agent […] and ordinary care was exercised in obtaining and transmitting it.” (emphasis is mine)

Won’t me saying bad things hurt the value of my home?

Probably. But what’s worse: Saying bad things now that might decrease the value of your home or avoiding disclosure and then being found liable for tens or hundreds of thousands of dollars in damages and legal fees long after you’ve moved on from the home? I can’t imagine it’s worth the risk to avoid disclosure.

When I bought the house, the seller didn’t tell me that!

I’ve run into a number of occasions where sellers find themselves in a position where they’ve learned of some defect that the previous owner failed to disclose to them. In this case, you still have a duty to disclose it. You may also want to speak with a real estate attorney (ask me for some recommendations) if the issue you discovered is substantial.

What are some examples of things that need to be disclosed?

This being the East Bay, I see a number of houses that were used as grow operations for marijuana. Former grow-ops are notable for a few reasons: harsh chemicals may have been used within the home, elevated moisture levels may have caused mold, and the electricity needs of grow-ops occasionally mean operators perform inadvisable and dangerous electrical modifications.

This is one of a very long list of items to disclose. Have a situation where the disclosure requirements are unclear or complex? Let’s talk about how to best protect your interests!

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