Tahoe Seller Disclosures 101
Congratulations you have accepted an offer to sell your Tahoe home, or condo. What happens next in the contingency period?
During the escrow process, as the seller you must inform the buyer about your property through a serious of mandatory and local disclosures. They may include the following:
Sellers of properties built prior to 1978 have the following obligations to the buyer:
- Give a HUD pamphlet entitled “Protect Your Family From Lead in Your Home”
- Disclose all known lead-based paint and related hazards and provide you with any available reports
- Include a standardized warning as an attachment to the contract
- Complete and sign statements verifying that requirements have been met
- Retain the signed acknowledgement for 3 years
- In addition, sellers must give buyers a 10-day opportunity to test for lead, so giving your disclosures in the first 7 days of the escrow becomes an important escrow timeline deadline for sellers to be aware of and meet.
California law requires sellers to disclose to buyers, via a “Natural Hazard Disclosure Statement” or NHD,and if the property is located in one of six predetermined “natural hazard” zones. Typically the NHD report is prepared by a third party company and will cover the following:
The six zones are:
- A flood hazard zone as designated by the Federal Emergency Management Agency (FEMA)
- An area of potential flooding after a dam failure (also known as an inundation area)
- A very high fire hazard zone
- A wild-land fire area, also known as a state fire responsibility area
- An earthquake fault zone
- A seismic hazard zone
My escrow team and I will order this NHD report on your behalf, and we will make sure your contract deadline for delivery of the NHD report is met. Buyers have three days to rescind the offer to buy any time the NHD is updated, or revised, even if contingencies have already been removed.
Note: Often third party NHD reports will not only cover the hazard zones, but will also provide other information on the property as well such as Mello-Roos information, Megan’s law, airport traffic flight patterns, location near industrial areas, methamphetamine reminder, along with other information that is unique to the region, or property location. Not all NHD reports are the same. If your Tahoe real estate agent has a preference, you’ll note it in your purchase offer.
Especially (but not exclusively) if you are buying a home in a newer area, you may be locating into a Mello-Roos tax district, and the seller must provide to you a “Notice of Special Tax” to let you know. If this notice is delivered to a buyer in person, they have three days to rescind their offer. If it’s delivered via U.S. mail, they have five days to decide to rescind.
Basically, a “Mello-Roos Community Facilities District” is formed by a local government, district, or agency to finance public services and facilities including police and fire departments, ambulance and paramedic services, parks, schools, libraries, museums and cultural facilities.
Condominiums , or Planned Unit Development, or a Property with a mandatory HOA group
If you’re buying a condominium, townhouse, a planned development, or a property with a mandatory HOA group (for purposes of this discussion, we will call them all “condominiums”), there are things you need to know about common areas (such as greenbelts and recreational rooms) and the home owner’s association.
Since the buyer will be required to make monthly, quarterly, or annual payments, known as regular assessments, to maintain common areas, as well as special assessments to replace a roof or repair the plumbing, as determined by the homeowner’s association (HOA) they will want information on the organization and as a seller it is your job to provide that information on your HOA group.
Condominiums also may have regulations regarding architectural requirements, limitations on pets, and age restrictions (i.e., senior housing). As a seller you must formally disclose these items to the buyer during the escrow. You may provide this information via the following documents, to the extent that they exist and are available:
- Declaration of Restrictions: Commonly known as “CC&Rs”, or Conditions, Covenants and Restrictions
- Articles of Incorporation or Articles of Association Bylaws
- All current financial information and related statements, including operating budget, estimated revenue and expenses, HOA reserves, estimated remaining life of major components (including roofs, plumbing etc.), and regular and special assessments
- A statement describing the HOA’s policies and practices in enforcing lien rights or other legal remedies for default in payment of its assessments
- A summary of the HOA’s property, general liability, and earthquake and flood insurance policies
- On existing HOA’s, a statement describing any restrictions on the basis of age, such as authorized senior citizen housing
Many smaller HOAs will not have all of these documents, but must provide what they do have. We recommend that as a seller you do your best to provide as much information on your HOA group as possible, because they will affect the buyer and your goal is always full disclosure.
In addition to the mandatory state disclosures that a seller is required to make toa buyer, there will also be a number of local disclosures that are specific to the property location, or area. My escrow team and I will help you get all of your disclosures organized, completed, and delivered to the buyers’ agent and their team.
As a Seller you’ll need to complete several property disclosures. Some are mandatory like the Transfer Disclosure Statement (TDS), and others are required as part of the sales contract like the Seller Property Questionnaire (SPQ).
We take Seller disclosures very seriously and we’ll have additional disclosures/information that you will be able to provide to a Buyer that will help them evaluate your property and the Tahoe area.
Have more questions? Need more help?
Call me at 530.414.1260 and I can help you find the right place to buy!
All information is deemed reliable, but is subject to change, and/or correction without notice.
Buyers and Sellers should investigate and verify all information to their own satisfaction.
Tahoe Seller Disclosures 101