California Civil Code Section 1102 requires anyone selling a home with one to four units to give the buyer a written Transfer Disclosure Statement (TDS) describing what the seller actually knows about the property’s condition. The requirement cannot be waived, an “as-is” sale does not remove it, and a seller who ignores it can be sued for the buyer’s actual damages. The form is not a warranty. It is a good-faith accounting of known problems, and it exists so buyers can decide whether to move forward, negotiate, or order deeper inspections.1California Legislative Information. California Code Civil Code 1102 – Disclosures Upon Transfer of Residential Property
What Section 1102 Covers
The statute reaches transfers of residential property with one to four dwelling units. That includes standard sales, exchanges, real property sales contracts, lease-option agreements, and ground leases sold with improvements. Resales of manufactured homes and mobilehomes used as residences are also covered.2California Legislative Information. California Civil Code 1102 – Disclosures Upon Transfer of Residential Property
Neither side can contract around the requirement. The statute declares any waiver void as against public policy, and California courts have held that an “as-is” clause does not eliminate the TDS obligation.1California Legislative Information. California Code Civil Code 1102 – Disclosures Upon Transfer of Residential Property
Sales That Are Exempt
Section 1102.2 recognizes a handful of situations where the seller has no meaningful knowledge to disclose, and it takes those transfers out of the form requirement:
- Court-ordered transfers, including probate sales, sales under a writ of execution, foreclosure sales, eminent domain, and transfers by a bankruptcy trustee.
- Foreclosure-related transfers, including a deed from a defaulting borrower to the lender, the foreclosure sale itself, and later sales by a lender that took the property through foreclosure or a deed in lieu.
- Transfers between co-owners, such as one co-owner buying out another.
- Transfers between spouses or blood relatives, and transfers arising from divorce or legal separation.
- Sales by a trustee, guardian, or conservator, unless the trustee is an individual who owned or lived in the property within the past year.
- New construction covered by a subdivided lands public report under the Business and Professions Code, since those buyers get separate statutory disclosures.
- Transfers to or from a government entity, and certain tax sale transfers.3California Legislative Information. California Code Civil Code CIV 1102.2
An exemption only lifts the form. It does not license concealment or fraud. A seller who is exempt from the TDS still cannot actively hide a known defect.
What the Seller Has to Put on the Form
The TDS runs several pages. The seller starts by identifying which features the property includes, from major appliances to smoke detectors to central heating and air conditioning. Then the seller checks whether they know of defects or malfunctions in the structural and mechanical components, including interior walls, ceilings, floors, the roof, foundation, electrical, and plumbing.2California Legislative Information. California Civil Code 1102 – Disclosures Upon Transfer of Residential Property
Beyond the physical structure, the seller has to disclose knowledge of:
- Room additions or structural changes made without required permits
- Shared features with neighbors, such as fences, walls, or driveways with joint maintenance obligations
- Encroachments or easements affecting the property
- Environmental hazards such as asbestos, lead-based paint, radon, or chemical storage
- Neighborhood noise problems or nuisances
- Pending or threatened lawsuits involving the property
- Damage from fire, flood, earthquake, or landslides
- Any notices of code violations or abatement orders
The form ends with a section for anything else that could affect the property’s value or desirability. That is where problems without a checkbox belong: recurring sewer backups, drainage issues, a death on the property within the last three years.
The key word throughout is “known.” The TDS asks what the seller is actually aware of. It does not require investigation or expertise the seller does not have.
The Listing Agent’s Independent Duty
Section 1102 does not stop at the seller. Under Section 1102.6, both the listing agent and the buyer’s agent fill out their own portions of the form. And under Civil Code Section 2079, the listing agent has a separate duty to conduct a reasonably competent visual inspection of accessible areas and report anything that affects value or desirability.2California Legislative Information. California Civil Code 1102 – Disclosures Upon Transfer of Residential Property
That inspection catches things the seller may no longer notice. A sagging roofline a homeowner has lived with for a decade should register with the agent walking through fresh. The duty is limited to what a visual inspection would reveal. Agents are not expected to open walls or run diagnostic tests. When an agent relies in good faith on information from a public agency or a qualified third party and passes it along with ordinary care, the agent is protected from liability for inaccuracies in that information.
How and When the TDS Must Be Delivered
The seller should deliver the completed TDS as early as possible, ideally before the buyer submits an offer. When the form or a material amendment arrives after the buyer has already signed, the buyer gets a statutory right to walk away. The buyer can terminate the purchase by giving the seller written notice within three days of personal delivery, or within five days if the disclosure was sent by mail.4California Legislative Information. California Code Civil Code 1102.3a
This is one of the strongest protections in the statute. A seller who delays disclosure hands the buyer an escape hatch that stays open well into escrow. Prompt delivery is self-protection.
Liability for Failing to Disclose
Missing or false disclosures do not automatically unwind the sale. The statute is explicit on that. But a seller or agent who willfully or negligently fails to perform disclosure duties is liable for the actual damages the buyer suffers as a result.5California Legislative Information. California Code Civil Code CIV 1102.13
Actual damages means the real financial cost. If a seller failed to disclose a cracked foundation and the buyer later spends $40,000 to repair it, that repair cost is recoverable. Where the concealment was intentional, buyers can also bring fraud claims, which open the door to broader remedies including punitive damages and, in some cases, rescission of the contract.
The line between willful and negligent matters. A seller who genuinely did not know about a hidden defect is unlikely to be liable, because the form only reaches known problems. A seller who watched the basement flood every winter and left the water damage line blank has crossed into willful nondisclosure, and that is where buyers win.
How Long a Buyer Has to Sue
Buyers who discover an undisclosed defect after closing do not have unlimited time. The deadline depends on the legal theory:
- Fraud or intentional concealment: three years from the date the buyer discovers, or reasonably should have discovered, the concealed facts.6California Legislative Information. California Code of Civil Procedure 338
- Negligent misrepresentation: three years under the same discovery rule.
- Breach of contract: four years from the date of the breach.
- Claims against a real estate agent: two years from the close of escrow, the recordation date, or the date the buyer takes occupancy, whichever comes first, under Civil Code Section 2079.4.
The discovery rule is what most buyers should focus on. The clock does not run from closing. It runs from the moment you find the problem or a reasonable person in your shoes would have found it. A buyer who saw water stains during the first rainstorm and waited four years will lose. A buyer who uncovers a concealed sewer line problem two years later during a remodel likely still has time.
If you find something the TDS did not warn you about, document it right away. Take photographs, get a contractor’s written assessment, and pull the original TDS to compare what the seller said about that specific item. That record is the backbone of any claim.