The Transfer Disclosure Statement, commonly referred to as the “TDS” disclosure, is a form that is legally required to be filled out by the seller of 1-4 residential units, as prescribed in Civil Code 1102.6.
This disclosure statement concerns the transferors (sellers) real property. The “TDS” is a disclosure of conditions pertaining to a property. This document is one of the seller’s disclosures that buyers receive during their contract contingency period. In addition to relying on the TDS, buyers are also encouraged to obtain any and all other inspections necessary to satisfy themselves as to the specific, as well as overall, condition of the property. It is always a good idea to get a general property inspection and a pest control inspection at a minimum.
The seller is required to provide information on the TDS with the knowledge that even though it is not a warranty; buyers may rely on the seller’s information in deciding whether or not to purchase the property. The “TDS” form asks the sellers many questions about the property. The questions range from asking for an inventory of all of the amenities the property has such as dishwasher, washer/dryer hookups, heating systems, satellite dishes, sump pumps, etc. to questions about improvements made to the property. The seller is asked well over 100 questions regarding the amenities and their working condition.
The seller is also asked about other possible conditions that could affect the value or desirability of the property such as encroachments, room additions, structure settling, soil and drainage problems, zoning, and neighborhood problems. This list of questions goes on and on. The purpose of this required disclosure is to protect both buyers and sellers. It is important that all parties understand all aspects of the property prior to the transfer of ownership.
There are a few situations where the transfer disclosure statement is not required: court orders, foreclosures, trustee sales, guardianships, and conservator-ships are just a few. But, by and large, the “TDS” is required by law in most real estate sales. For more specific information, please contact your Realtor.
This article was written for the San Francisco Examiner.
Eric Ruxton and Larry Aikins are the owners of Terrace Realty Inc. and Terrace Associates Inc., in Redwood City. Terrace has been in business for over 50 years and in addition to being an independent Brokerage Company, also owns and operates rental properties.