What do you have to disclose when selling a house in San Francisco? This article will explain all the details you need to know about providing disclosures in San Francisco.
By law, you’re required to disclose the condition of your home. That means you need to fully explain any issues with the house that can pose a risk to the safety and well-being of future residents. Disclosures protect you from future legal issues. The reason is because the buyer can sue you in the future in case they find issues with the house that were present but not disclosed at the time of sale.
Generally, you will find the following information in seller disclosures in San Francisco:
● Underground Storage Tank Report
● The current and past condition of the house
● History of repairs and major renovations (Legal and Illegal)
● Tenant or Vacancy Information
● Residential Building Records Report (3R)
● Water and Energy Compliance
● Home Inspection report
In many of these disclosures, the seller needs to disclose what happened during your ownership during the period that the house was under your care.
What Information Do I Need to Disclose?
The seller’s disclosure documents list all the items that can affect the quality of life. These are in addition to what the property inspection report mentions. For example, a property inspector might not figure out that the roof leaks during a heavy rainy season. Only someone who has lived on the property through the rainy season will know that! So, you need to include that detail in your disclosure to the best of your knowledge.
Underground Storage Tank Report
The California State Water Resources Control Board has also established guidelines for monitoring underground storage. You might want to get a soil analysis to understand if there is or was an underground storage tank (UST) sitting under your property. You will need to provide a report detailing the condition of the tank. Problems with the UST can lead to soil contamination and related issues.
Residential Building Records (3R) Reports
You’re required to provide a history of building permits in San Francisco. That report contains information like the history of construction, which includes plumbing, electrical, and planning permits. This helps you access the public building records to see the recorded history of the house.
Water and Energy Compliance
As per the law, you need to conserve water and energy in San Francisco. There are two main parts to the report: water and energy. For the water part, it checks things like the faucets in the house, which can’t be using too much water to comply with the residential conservation ordinance.
The second part is energy, where it makes sure that the attic, doors, water pipes, and building exterior are sealed and have insulation.
According to the ordinance, you need to inspect the house, make corresponding changes, and then get a compliance report before putting the home up for sale. That is a basic requirement in San Francisco, and you will need to include that information in the disclosure document.
What else do I need to include in the seller’s disclosure?
Just think about your home in detail and think of all the problematic aspects that you faced while occupying the property. You will need to include the status of the following:
● The structural integrity of the house
● Water damage or related issues
● Pest infestations
● Mold
● Usage of lead-based paint or presence of asbestos
● Electric or plumbing issues
● Roof issues
● Environmental hazards
When Do I Provide this Selling Disclosure?
You need to have that document ready. Your real estate agent will provide the document to the prospective buyer within 5 days of accepting an offer or even before making an offer on the property. It’s a good idea to forward the disclosure as soon as possible to avoid any delays in the selling process. This way, the potential buyer can remove contingencies as soon as possible, which makes it a clean offer.
What if I am selling my house as-is in San Francisco?
Disclosing every aspect of the property seems cumbersome, and you might think, “I should just sell it as-is.”. You can sell your home as-is, but that doesn’t free you from disclosing the condition of the property. The home should be habitable without posing any safety risks.
Selling as-is means that the future homeowner is responsible for all repairs, and the seller won’t bear the financial burden of repairs. You can disclose the condition, and the buyer expects to purchase the home in as-is condition.
How Should Disclosures Be Provided?
Disclosures should always be provided in written form. You can verbally communicate the condition of your house, but that won’t count for legal protection. Your real estate agent will provide forms and help schedule services to comply with this on your behalf. In the new age of the internet, this is typically provided online through https://www.disclosures.io/.
Generally, written disclosure should provide a comprehensive list of known issues with the house. If you have had a recent property inspection, you should send that report along with the disclosure. If not, I know a few great companies, like Golden Gate Home Inspection and West Valley Structural, that I can recommend.
Failing to provide disclosure can have long-term negative consequences, leading to the buyer taking action against the seller. They can sue the seller for damages, which can include the repair cost or even the full purchase price.
For instance, a case came to my attention where the sellers installed an electric fireplace in their living room without an inspection for quick completion. Despite its advanced features like heat generation, various lighting options, and WIFI connectivity, they failed to disclose this addition when selling the house, marking on the disclosure form that no modifications were made. Later, the fireplace malfunctioned due to faulty wiring and caused a fire. The insurance investigation traced the issue back to the undisclosed installation, with the key case being the manufacturing date of the electrical wires, leading to the insurance company successfully suing the previous homeowners for repair costs.
This is why an experienced real estate agent is worth their weight. It’s always best to work with an experienced agent in San Francisco who understands the legal intricacies and will protect your interests in every transaction.
