Disclosures: The #1 Legal Issue After Closing (And It’s Preventable!)

For buyers in California, it's rare to actually have an attorney involved in the purchase – if attorneys are getting involved it’s usually because something has gone wrong - someone won’t perform or after closing something is wrong with the house.

 I work with buyers in California to deal with the legal stuff (spoiler alert - THERE'S A LOT!) that happens during escrow.

California real estate sales require sellers to disclose a lot about their property but if you don't know what you're looking at, what you're looking for, and whether the seller actually disclosed properly, you might find yourself talking with another attorney about a seller disclosure lawsuit after you bought the house. This area is probably the most problematic during the purchase and within the first couple of years after purchasing the home.

Why are disclosures such a nightmare? Because it requires the seller to dig really deep and provide a lot of information about the house. Most sellers put very little thought into their answers, don’t actually answer the questions fully when they need to, or simply forget to put information down. This isn’t a surprise to me (or most of my colleagues).

News flash – sellers inherit ALL of the knowledge about the property, including the disclosures and inspections they received when they originally bought the property, whether that was 3 years ago or 30 years ago. Sellers have a HUGE responsibility to disclose and when not done properly, may expose the seller to very costly mediation/litigation for failing to disclose.

Can you see why this can cause so many problems? On its face, the documents a buyer receives – the Transfer Disclosure Statement (TDS) and Seller Property Questionnaire (SPQ) appear “good enough” when the seller checks all the right boxes and maybe puts a little more information about why they checked yes, but there is so much more of the story that is missing.

The real estate agents involved do what they can – provide the forms for the client to fill out (or review) – but they can’t help the client prepare the form. They can’t tell a buyer if the answers are sufficient.

It’s no wonder there are so many disputes around seller disclosures.

Working with a real estate attorney during your purchase or sale to supplement the work of your real estate agent can save you thousands in the long run. Buyers get the benefit of really knowing what the disclosures mean and how it impacts their purchase. Seller gets the benefit of having someone walk them through how to actually prepare these disclosures to minimize the risk of issues with the buyer saying something wasn’t disclosed properly.

Buying or selling a home in California? Don’t wait for the problem to find you to bring an attorney in. The legal side of real estate can be full of surprises – and let’s be honest – they’re rarely the good kind. Whether you’re in escrow now or just starting to think about buying or selling, having a real estate attorney in your corner can help you understand what you’re signing, what’s being disclosed (or not!), and how to protect yourself from the start.

Let’s make sure your deal doesn’t turn into a disaster. Reach out for a consultation — even if you’re already working with a great agent.

I’m here to support the legal side, so you can close with confidence.