By this point everyone is familiar with the California Real Estate disclosure statement required when selling a one to four unit property in the state of California. What still however, leaves a lot of confusion and open-ended liabilities are the implications that go beyond the questions on the three-page form. Here are some easy rules to follow:

1. Be as accurate and complete with your answers to the questions as possible.

2. Spend extra time thinking about drainage, settlement and foundation issues. Make accurate disclosures regarding dampness, moisture and the pooling of water that may occur occasionally during unusual weather conditions, even if it is rare.

3. Disclose any corrections or repairs you have made, even if you believed that you have remedied the problem. Provide dates and the scope of work done. This gives the prospective purchaser the opportunity to ask questions if they desire.

4. If you believe that certain systems are in need of upgrade and have obtained written estimates, provide the estimates and an explanation of why the estimates were obtained and the work was not done.

5. Provide disclosures for reoccurring occurrences of sewage backups or plumbing problems, roof leaks, electrical shorts or failures and issues pertaining to inadequate weatherproofing.

6. Be sure to provide any environmental issues, particularly regarding asbestos. Cottage cheese ceilings prior to 1978 typically do contain some asbestos content as do forced air heating systems prior to 1978, as do most of the older gravity furnaces. A visual inspection of the ducting will provide evidence of a "papier-mâché" like material as opposed to the recent metal ducting, which is now the asbestos free method.

7. De sure to disclose all agreements between neighbors including encroachments, easements or variances. Often property lines and boundary issues come up regarding gates, fences, vegetable gardens, patios and decks not within the five foot side yard setbacks and ten foot set backs from the rear of the property. Carports, awnings and patio roofs are other issues that can cause problems.

8. Disclose non-permitted improvements. Remember, Department of Building and Safety says one needs a permit even to replace a roof or water heater even though most people don't bother. De sure to disclose non-permitted patio covers, decks, spas, carports and room conversions, electrical upgrades and plumbing installations. Also disclose zoning restrictions when homes include a studio or guesthouse. Guest homes usually will not allow a second full kitchen or bathing facility on an R1, single family zone.

9. Lot descriptions, boundaries and land use restrictions can be important.

10. Easements, right of way and limitations based on the placement of under ground sewage or septic lines must be disclosed.

11. Previous slippage or slide problems should be disclosed even if it is currently stabilized. Even a minor backyard hill slippage that occurred five years ago during a heavy rain that you are aware of should be disclosed.

12. If your disclosure is based on third party hear say, add that to your disclosure.

13. Disclose reoccurring cracks, mold or mildew (description and location) particularly if you have recently painted and the cracks or mildew are not currently apparent.

14. Disclose roof leaks, windows emitting moisture and skylight leaks, even if they are minor, even if recently repaired, stating that the repair has been made but is not guaranteed.

15. Disclose fireplace or chimney cracks, earthquake damage earthquake repairs or fireplace smoke problems. If repairs have been made, disclose whether or not there was a permit filed.

16. Disclose any drainage issues, which might involve water from your property draining over a neighbor's property or a neighbor's water draining over your property.

17. Disclose when a roof has more then two layers of material, which is currently not to code. Current code requires a total tear off and a plywood base if there are currently two layers of roofing material on the dwelling already.

18. Disclose any neighbor problems, arguments, disputes, barking dogs, loud music and party issues, parking problems,violence issues, law enforcement issues, etc. Disclose near proximity of a rehabilitation residence if it appears out of character with the neighborhood. Any peculiar issues that might present the new owners with doubt or reservation should be disclosed. For example, a neighbor running a business from his/her home or a neighbor that seems to have an unusual amount of activity in and out might be worth a quick disclosure. Also disclose noise issues from overhead, air traffic and adjacent businesses, etc.

19. Superstitions can become an issue. It is wise to disclose previous acts of violence either that occurred on premises or on the street. A death occurring in the house during your occupancy within the past five years or a pool drowning is an issue that I would suggest disclosing. Even a terrifying, near death experience is worth considering as a disclosure.

20. Reoccurring headaches or illness occurring from element issues such as mildew, moisture and mold should be disclosed.

21. Be sure to disclose contamination issues such as ground contamination from an auto mechanics pit that might have left oil or environmentally hazardous fluids in the ground.

22. Disclose any potential health and safety issues; poisonous plants, cracked shower doors, slippery or steep steps and driveways, etc.

23. Most important of all is to disclose anything that might have a negative influence on a client's desire to own your property or anything that might have a negative influence on the price a client might be willing to pay. If a judge later on can be persuaded that, had issues been known, the client would have chosen not to buy your property or would have chosen not to pay as much for your property, it could end up costing you. Its better to be safe up front... Please be very forth coming with your disclosures.

The disclosure issue is not a totally "black & white" issue. It is not so cut and dry as sticking with the questions on the three page Real Estate Transfer Disclosure Statement form. Feel free to add extra pages and elaborate on your comments. A good idea is to recheck the disclosure you received when you purchased and to review the physical inspection report you received at the time you purchased as well. Obviously many of the issues, no doubt have been resolved and no longer exist but still, reviewing these documents will open your mind as you consider all issues. As a final thought, in your mind, walk through your home, room by room and the walk around the complete exterior, then think underneath, then think on top so you will not forget anything- and lastly, if you have a partner/co-owner or spouse, ask for their complete input as well just as a safety net for what you may have overlooked.

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~~ This article was written by Ron Wynn - 8/2000 ~~