Does law require TDS/disclosures made before Buyers inspections?

11 Replies

For transactions where a TDS (Transfer Disclosure Statement) is required, I'm curious if there is anything in the code/law which states the timeline for those disclosures to be made to Buyer? 

Obviously it would be in the Buyers best interest to have all disclosures and previous reports on hand before the Buyer pays to have multiple inspectors look at the home. This would give inspectors an idea of what previous work or remediation was done on a property and verify the work resolved issue, was done correctly, safely, etc. 

But does the law require Seller or their broker/agent to present them during or before inspection period? Of course regardless of law, a savvy Buyer (or Buyer's agent) could always write this in to offer or purchase agreement -- they're going to have to be disclosed at some point anyway, right?

If you use the California CAR form the timeline is specified in the purchase contract.

The buyer has a certain number of days from receipt to cancel, so it's best to get it in buyers hands as soon as possible.  If they are going to cancel better sooner than later so seller can move on.

Originally posted by Account Closed:

If you use the California CAR form the timeline is specified in the purchase contract.

The buyer has a certain number of days from receipt to cancel, so it's best to get it in buyers hands as soon as possible.  If they are going to cancel better sooner than later so seller can move on.

Right, but if there is 17 day inspection period and Sellers/Agent provides TDS on day 17... :)

Obviously not in SELLERS or BUYERS best interest with that move... but sometimes delays happen I guess.

I would think if there isn't a law or code stating when the TDS is required to be completed and presented, then it would be in BUYERS best interest not to start the inspection period timer until the TDS is received.  This way the TDS can be shown to Buyers inspectors.

I'm primarily interested if the civil code defines the order and presentation of things here though.  It would seem logical to present TDS to buyer before buyer pays for $500+ in inspections.  

@Jay G.

CA Civil Code 1102.3(a) says "in the case of a sale, as soon as practicable before transfer of title."  But the contract itself has a stricter timeline.

I'm not entirely sure what you are getting at.

You say "Right, but if there is 17 day inspection period and Sellers/Agent provides TDS on day 17" ... all this does is give buyer additional time to cancel since buyer has a certain period of time from receipt of TDS to cancel.

If your goal is to give seller additional time to cancel then giving them the TDS on day 17 will accomplish your goal.

The inspection timer starts upon sellers acceptance of purchase contract.

Also, I'd have to go back and read the contract, but I think if anything 'material' pops up whether from inspection, TDS or otherwise buyer gets additional time to either cancel or seller to fix.

The TDS only has to be presented after a purchase agreement is signed. After the TDS is delivered to the buyer they have 3 days (if delivered in person) or 5 days (if mailed ) to cancel the contract The law does not tie the delivery of the TDS to the inspection. Most agents deliver the TDS immediately after the signed purchase agreement 

http://www.dre.ca.gov/files/pdf/re6.pdf

Originally posted by Account Closed:

@Jay G.

CA Civil Code 1102.3(a) says "in the case of a sale, as soon as practicable before transfer of title."  But the contract itself has a stricter timeline.

I'm not entirely sure what you are getting at.

You say "Right, but if there is 17 day inspection period and Sellers/Agent provides TDS on day 17" ... all this does is give buyer additional time to cancel since buyer has a certain period of time from receipt of TDS to cancel.

If your goal is to give seller additional time to cancel then giving them the TDS on day 17 will accomplish your goal.

The inspection timer starts upon sellers acceptance of purchase contract.

Also, I'd have to go back and read the contract, but I think if anything 'material' pops up whether from inspection, TDS or otherwise buyer gets additional time to either cancel or seller to fix.

Assume other way around....  I (as a Buyer) want to see TDS before hiring any inspectors so I can ask them to look closely at specific areas.

You as seller are trying to hide something and are hoping buyers inspector will miss it.  Could work.  But probably not.  Buyer will most likely email TDS to inspector asking, hey, anything here we have to be concerned about, inspector will respond with his opinion.

Dude, your underlying assumption is that buyer, buyer's agent, buyer's attorney, buyer's inspector are all idoits...could happen but unlikely.

Whatever your issue is may not be as big as you think...face it head on.

Jay, the seller is obligated to provide a TDS within the time agreed to in the agreement.  The exception to this is if the property is a foreclosure or a probate as the seller has not lived in the property per code.  If you receive the TDS after your inspection period, most purchase agreements allow for a period of time such as 3 days to review the information and then decide to continue the transaction or not.  Seller disclosures typically happen within 7 days with a competent listing agent, but are only required to be delivered in the time per contract.  This is why you have inspections.  It is a process of discovery.  Please ask any questions you may have.  I am a California Broker.

@Jay G. , there are two sources for requirements regarding the Transfer Disclosure Statement: statute and contract.  Under Civil Code 1102.3, the seller is required to deliver the TDS "as soon as practicable before transfer of title" and provides the buyer with a set number of days (based on delivery method) to cancel the transaction.  The C.A.R. Purchase Agreement by default requires the delivery of certain disclosures, including the TDS, within 7 days of the Acceptance Date and provides a 17 day period for review and acceptance of disclosures.  So, the buyer should have the time from day 7 to day 17 to conduct inspections with the disclosures in hand.

Originally posted by Account Closed:

You as seller are trying to hide something and are hoping buyers inspector will miss it. 

Absolutely not. Other way around - I'm buyer and want to see a TDS before first inspection.  These days with at least one Home Depot and Lowe's in every metro area, there are plenty of weekend warrior type home improvement DIY'ers. Lots of not-so-professional work happening. The TDS obviously helps (by law) require the sellers to disclose WHERE that weekend warrior work is - they're supposed to disclose it anyway.  Before I spend a dime, or lose a day, on inspection of someone else's property, I'd like to see a TDS. 

@Jay G.

In my experience listing agents want the TDS in the buyers hands as soon as possible so buyers don't have the right to cancel beyond the inspection contingency.

If the TDS doesn't hit buyers hands early it's generally because seller is slow in completing it because they have so much else going on.

Have you had a bad experience with this or are you simply trying to understand the process?

Originally posted by Account Closed:

@Jay G.

In my experience listing agents want the TDS in the buyers hands as soon as possible so buyers don't have the right to cancel beyond the inspection contingency.

If the TDS doesn't hit buyers hands early it's generally because seller is slow in completing it because they have so much else going on.

Have you had a bad experience with this or are you simply trying to understand the process?

Thanks for reply.   A little of both - as a seller awhile back my broker didn't present the TDS form until later in sale (some things going on in Brokers personal life at time to excuse it - but I had no idea of the form or my responsibility there) exposing me to additional risk.  NOW, as a buyer, I can understand how helpful it is for me to have the TDS before I pay to have any inspections completed, because anything on the TDS related, for example, to a past roof leak could be looked at during roof inspection, or related to a past fungal/dry rot issue could be looked at by pest inspection to ensure the past repairs held through time.