Real estate sellers must provide specific documents to buyers in compliance with the law. However, it also has exceptions, depending on the circumstances of the transaction.
Real estate transfer disclosure statements outline the property’s details and overall condition. They also contain information about issues undetectable to regular inspections.
If the seller fails to provide the disclosure or meets its deadline, they might risk receiving penalties and lawsuits. However, the law provides exceptions based on the transaction’s details. The transfer disclosure statement requirement might not apply to the following transactions:
- Certain transfers under the California Business and Professions Code § 11018.1 and § 11018.8.
- Court-ordered transfers
- Foreclosed property
- Fiduciary-facilitated transfers for estate administration unless the property is in a revocable trust and the trustee formerly owned or occupied it during the previous year from the transaction.
- Transfers between co-owners
- Transactions between direct descendants
- Divorce-related transfers
- Transfers governed by the Unclaimed Property Law
- Transactions brought about by unpaid property taxes
- Transactions from government entities
Still, eligibility for these exceptions could significantly depend on the circumstances surrounding the property or transfer.
Penalties for disclosure statement violations
Determining exceptions is vital to keeping the transaction legal. If you make a mistake and fail to meet this requirement, you could face the following penalties:
- Civil fines not exceeding $10,000 for each offense
- Criminal fines not exceeding $10,000
- A maximum of one-year jail time
- Paying compensation if the buyer suffers damages
California laws take real estate disclosures seriously. Getting sound legal counsel can help confirm if the transaction falls under these exceptions.
Even the smallest detail could turn the situation around, potentially enforcing the disclosure statement requirement. Taking time to verify legal information could help a seller avoid problems.