Based on questions I frequently hear, it appears people are confused about whether homes can be sold “as is” in California. I’ve heard sellers say, “I’m selling my house ‘as is’ so I don’t have to disclose anything.” I’ve also heard, “I live in California, so I can’t sell my house ‘as is.’” Both are wrong.
The real story is that you must disclose any material facts about the property that you know or should have known; a judge will make this call, if necessary. (You don’t want to involve a judge, that’s a very expensive decision, even if you win.) So, if you think anybody would consider an issue regarding your property of interest, tell them up front, preferably before the purchase offer.
“As is” sales are completely legal in California, as long as you disclose all legally required information. As a reminder, typically disclosures fall into the following three main categories.
Property-specific disclosures include things like a leaky roof, a well that runs out of water each September, a septic system that has a swamp over it, or an addition for which there is no building permit. Proximity-specific issues can include things like whether a property is at the bottom of a hill with erosion problems, near a Superfund contamination site, or within earshot of a popular shooting range. And finally, regulatory disclosures include zoning and other issues. For example, is the property zoned for its current use or within 300 feet of land zoned for agriculture or industrial use? These issues can affect how the property can be used and the owner’s quiet enjoyment of it.
One unusual disclosure requirement has to do with whether there’s been a death on the property within the past three years. Unless the death is AIDS-related, a seller must tell a potential buyer that a death occurred there (whether of natural causes or of a more violent nature). The AIDS exception is kind of an odd one, but laws aren’t always known for their logic. If a buyer asks a seller directly whether someone died in the home, and the death is AIDS-related, the seller can simply say he’s not at liberty to discuss this issue. He cannot lie (or at least he shouldn’t).
A new disclosure ordinance is called the “right to industry” ordinance. It mirrors an ordinance in place for agricultural properties. The right to industry ordinance requires disclosure of the fact that the property for sale is within 300 feet of an industrial site and that buyers of the property may experience nuisance from the industrial site such as noise, smell, traffic, etc.
“As is” sales allow you to sell a property without addressing problems, with a few important exceptions. A house must meet specific requirements, and if it doesn’t, the homeowner is required to have the work done. Some requirements are safety-related: water heaters must be braced and all homes must have functioning smoke alarms and carbon monoxide alarms. Some conservation and energy retrofits are required, like low-flow toilets and weather stripping. The conservation and energy retrofits are usually dictated by local ordinances.
Next time I’ll write about consumer confidence. If there’s something you would like me to write about or if you have questions about real estate or property management, feel free to contact me at email@example.com or visit our website at www.realtyworldselzer.com. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 35 years.