I received a letter recently asking if Mendocino County has “local traditions” around what is revealed when selling real estate. This gentleman sold his house in the Bay Area, where he disclosed everything he was supposed to. He then bought a property locally where the seller failed to mention some rather important details, not least of which was that neighbors called his house “the snake house” because it attracted so many rattlesnakes.
In answer to his question, Mendocino County does not have any traditions about hiding information that should be shared. When selling real estate locally and throughout the state, sellers are legally responsible for disclosing anything they know (or should have known) that would negatively affect the value of the property or a buyer’s interest in owning it. There are about 20 typical disclosure documents in California amounting to more than 225 pages of disclosure information. Not every property requires every disclosure, but every property requires some disclosures.
Bottom line, if you are buying real estate and you do not receive several disclosures, something isn’t right.
Typically, disclosures fall into three main categories: property-specific, proximity-specific, and regulatory. Property-specific disclosures include things like a leaky roof, a well that runs out of water each September, or an addition for which there is no building permit. If, as a seller, you paint over a water stain on the ceiling or patch over a tiny bit of dry rot in the bathroom, and you really truly believe these things will never cause the future homeowner any problems, you still must disclose them.
Proximity-specific disclosures involve factors that could influence how someone feels about living in the house—being next door to a marijuana grow that has a pungent odor during harvest, having to listen to the neighbor’s dogs bark all night every night, or the fact that your property has a well-established reputation as the neighborhood’s snake house.
Regulatory disclosures involve zoning and other statutory issues. For example, is the property zoned for its current use or is it within 50 feet of an Alquist Priolo zone, indicating it may be near an earthquake fault line? (If it is in an Alquist Priolo zone, the property must be compared against a special map specifically for that disclosure.) Basically, sellers must disclose issues that can affect how the property can be used and the owner’s enjoyment of it.
Which disclosures are required depends on the property’s age, location, and whether it includes certain amenities. Is the property near an agricultural zone where harvesters will wake you up at all hours of the night in fall? Does it include asbestos or lead-based paint? Is there a well to consider?
If a seller wonders whether to disclose something, a good Realtor will always advise a strong YES! If the seller argues that the disclosure might ruin the sale, then the answer is a double YES. Better to have a potential sale fall through than to have a completed transaction undone.
What you really don’t want is a buyer to discover those three inches of dry rot under the bathroom floor right after the job transfer that brought them to the area just fell through and they need to move back to Phoenix, or right after the housing market plummets and they realize they are underwater on their mortgage. Because at that point, regardless of the truth, they can say, “I would never have purchased this house if I had only known about dry rot [or fill in the blank with any number of minor problems that were not disclosed]. Please return my money and you can have your house back.” The fact that you’ve already purchased another house and cannot afford to return the money won’t sway a judge.
Fortunately for the seller of the snake house, the buyer loves the house anyway.
If you have questions about property management or real estate, please contact me at firstname.lastname@example.org or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery. Dick Selzer is a real estate broker who has been in the business for more than 45 years.