A WORD ABOUT FULL DISCLOSURE
Legal decisions, legislation, and common sense dictate that a Seller has a responsibility to reveal to you the true condition of the property. Selling a property without disclosure, or forcing the Buyer to assume all responsibility for determining the property condition, is not acceptable in the present marketplace. A Seller must disclose the known defects of the property to the Buyer. This information should be made available to the Buyer as soon as possible
Charm or Irritant?
Having lived in this property, the Seller has become accustomed to the peculiar conditions that may have developed in the house. But for the Buyer, these peculiarities may be more than a mere inconvenience, and may in fact be an irritant the Buyer cannot tolerate. It is important for the Seller to review the condition of the property with the Realtor and make special note of any problems on the Disclosure Statement. Civil code section 1102 requires that the Seller provide the Buyer with a completed Real Estate Transfer Disclosure Statement.
All Systems Go
A basis assumption in every sale is that the house and the systems in the house are functional –for example, the roof will hold out the rain and sun, the hot water heater will provide hot water, and the heater will provide heat. If it is known that any of the systems do not function properly, such facts should be included in the purchase agreement and acknowledge by the Buyer.
An “as is” purchase contract is perfectly acceptable only as long as the Buyer understands exactly what the “as is” condition entails. Thus it can be said in the Purchase Agreement that the Buyer accepts the roof, plumbing, and electrical system in their present condition and acknowledges that they have defects. This acknowledgement provides a defense for the Seller if it is later claimed the problems were not disclosed.
The Seller must disclose any knowledge of environmental hazards such as asbestos or pollutants in the home or on the property. The buyer will be provided with a Real Estate Transfer Disclosure Statement, in which the Seller declares their knowledge on this subject.
Personal vs. Real Property
The distinction between personal property and real property can be a source of difficulties in a real estate transaction. A Purchase Contract is normally written to include all real property; that is, all aspects of the property that are fastened down or an integral part of the structure. For example, this would include light fixtures, drapery rods, attached mirrors, trees and shrubs in the ground. It would not normally include potted plants, free-standing refrigerators, washers/dryers, microwaves, bookcases, swag lamps, etc. If there is any uncertainty about whether an item is included in the sale or not, it is best to be sure that the particular item is mentioned in the Purchase Agreement as included or excluded.