California home sale disclosures: the main rules, checked in 2026

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Kooky

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A home sale in California comes with a stack of paper that has nothing to do with the price. Before title passes, the seller describes the condition of the building on a state form, says whether the land sits in a flood, fire or earthquake zone, passes on a notice of special taxes and, in a development run by an owners' association, hands over the association's documents. Each duty sits in a different part of the codes, and the main one gives the buyer a way out of the deal when the paper arrives late.

The usual starting point is a booklet of the California Department of Real Estate, "Disclosures in Real Property Transactions". The edition the Department publishes is the sixth, dated 2005, and a booklet of that age cannot be taken on trust. This guide therefore sets its main rules against texts current in October 2026: copies of the Civil Code sections as an online legal publisher republishes them, the Franchise Tax Board's instructions for 2026 and the Internal Revenue Service's page on foreign sellers. It describes the position as read in October 2026, says where the booklet has been overtaken, and ends with what could not be re-checked. The rules are California's, with one federal rule; none carries over to another state.

Civil Code sections 1102.3 and 1103, as republished by the legal publisher Public Law in copies it marks as verified on 5 October 2026.

How the rules were checked, and on which texts

Three kinds of text stand behind this guide. The first is the Department of Real Estate's own material: the 2005 booklet, and chapter 20 of the Department's Reference Book, which carries no edition date on the pages read. The Department's "2026 Real Estate Law" page, stated as of 1 January 2026, points readers to the legislature's site for the codes.

The second is the Civil Code as it reads now. The legislature's site could not be read directly for this guide, so the sections were read in the copies republished by Public Law, an online legal publisher. Each copy names the legislature's page as its source and prints two dates: the date the section was last updated, and the date the publisher last verified its copy, which was 5 October 2026 for every Civil Code section used here. These are copies, not the official text, and they are cited as copies throughout.

The third is the tax agencies. The Franchise Tax Board's "2026 Instructions for Form 593" give the state withholding rules for the 2026 taxable year, and the Internal Revenue Service's page on withholding from foreign sellers was reviewed on 21 July 2026.

The main rules of the 2005 booklet still stand in the copies read, with the same section numbers for the transfer disclosure statement, the natural hazard statement, the agent's inspection, the special tax notice and the rule on a death at the property. Four things have moved: the wording of the property the rules apply to, a third way to start the buyer's termination period, the section that holds the association documents, and the federal withholding rate.

Which sales need a transfer disclosure statement

The central document is the Real Estate Transfer Disclosure Statement. The Department's booklet places it under Civil Code section 1102 and the sections that follow, and that numbering is unchanged in the copy of section 1102 read for this guide, which shows the section as last updated on 1 January 2020.

Subdivision (a) of that copy lists the transfers covered: a sale, an exchange, a real property sales contract as defined in Civil Code section 2985, a lease with an option to purchase, any other option to purchase, and a ground lease coupled with improvements. This is the list the booklet gives, with the booklet's "installment land sale contract" now called a real property sales contract.

The property is described differently. The 2005 booklet speaks of real property improved with one to four dwelling units. The current copy speaks of "single-family residential property" and, in subdivision (b), takes the meaning of its terms from the opening chapter of the real estate licensing law, which starts at Business and Professions Code section 10000. That chapter defines the term in section 10018.08, read in a copy last updated on 1 January 2019 and verified on 28 September 2026. It has three parts:

• real property improved with one to four dwelling units, including certain long-term leaseholds;
• a unit in a residential stock cooperative, condominium or planned unit development;
• a mobilehome or manufactured home when it is offered for sale or sold through a real estate broker.

The one-to-four-unit test of the booklet is thus the first limb of the present definition.

Subdivision (c) of section 1102 adds a rule the booklet does not report in these words: any waiver of the requirements of the article is void as against public policy.

The transfers the statute leaves out

The exemptions are in Civil Code section 1102.2. The booklet counts ten. The copy read for this guide, last updated on 1 January 2021, has thirteen lettered subdivisions, from (a) to (m). Twelve describe transfers and the last is a rule of interpretation.

1. Sales that require a subdivision public report to be given to the buyer under Business and Professions Code section 11018.1, and transfers that can be made without one under section 11010.4.
2. Transfers under a court order, including probate sales, sales under a writ of execution, foreclosure sales, transfers by a trustee in bankruptcy, eminent domain and decrees of specific performance.
3. Transfers linked to a default: to a lender by an owner in default, by a foreclosure or power-of-sale sale after default, and the resale by a lender that took the property through foreclosure or a deed in lieu. The same subdivision covers manufactured homes and mobilehomes taken back by a lienholder.
4. Transfers by a fiduciary administering a trust, a guardianship, a conservatorship or a decedent's estate.
5. Transfers from one co-owner to one or more other co-owners.
6. Transfers to a spouse, or to a person in the lineal line of consanguinity.
7. Transfers between spouses under a judgment of dissolution or legal separation, or a property settlement agreement incidental to one.
8. Transfers by the State Controller of unclaimed property.
9. Transfers resulting from a failure to pay taxes, under two named chapters of the Revenue and Taxation Code.
10. Sales, transfers or exchanges to or from any governmental entity.
11. The sale of any portion of a property that is not single-family residential property.
12. The creation or transfer of a lease of any length, except a lease with an option to purchase or a ground lease coupled with improvements.

Two points differ from the booklet. The fiduciary exemption has a narrower exception than the booklet's "trustee who is a former owner": in the copy read, the exemption is lost where the trustee is a natural person who is trustee of a revocable trust and who was a former owner of the property or an occupant in possession within the preceding year. And items 11 and 12 do not appear in the booklet's list at all.

Subdivision (m) says "sale" and "transfer" keep their commonly understood meanings. The booklet's caution on the first exemption, that a broker in a new subdivision sale still owes a duty to disclose material facts, comes from the booklet alone.

When it is delivered, and the three or five days

Timing and the buyer's exit are in Civil Code section 1102.3, read in a copy last updated on 1 January 2020. The booklet's account holds, with one addition.

For a sale, the seller delivers the completed statement "as soon as practicable before transfer of title". For a real property sales contract, a lease with an option to purchase or a ground lease coupled with improvements, delivery comes as soon as practicable before the contract is executed, and the copy says that execution means the making or acceptance of an offer. The seller also indicates compliance with the article, either on the contract, the lease or an addendum attached to it, or on a separate document.

The Department's Reference Book chapter says the seller generally has 7 days to deliver the statement. Neither the booklet nor the copy of section 1102.3 gives such a number, and the chapter is undated, so the figure is reported here as that chapter's alone.

What follows late delivery is the heart of the section. If a required disclosure, or a material amendment to one, is delivered after the execution of an offer to purchase, the buyer may terminate the offer by written notice. The booklet gives two periods. The copy read gives three ways of starting the clock.

The electronic route applies, in the copy read, where the parties have agreed to conduct the transaction by electronic means under the Uniform Electronic Transactions Act.

The copy also says when the period starts to run. It begins when Sections I and II of the statement have been completed and delivered to the buyer or the buyer's agent, together with Section III where the seller has an agent.

The right is tied to late delivery. Section 1102.3 as read does not say what follows where a statement is wrong or is never delivered; those questions belong to other sections, which were not read for this guide, and to the facts of the case.

The agent's visual inspection

The agents have a duty of their own in Civil Code section 2079, read in a copy last updated on 1 January 2020. The number and the standard are those the booklet gives.

Subdivision (a) places the duty on a real estate broker or salesperson licensed under Division 4 of the Business and Professions Code. It is owed to a prospective buyer of residential real property improved with one to four dwelling units, or of a manufactured home as defined in Health and Safety Code section 18007. This section keeps the one-to-four-unit wording that section 1102 has dropped. The licensee must conduct a "reasonably competent and diligent visual inspection" of the property offered for sale and disclose to the prospective buyer all facts materially affecting the value or desirability of the property that an investigation would reveal.

The duty applies to the broker who has a written contract with the seller to find or obtain a buyer, the listing agent in everyday speech, and to a broker who acts in cooperation with that broker to find and obtain a buyer. Subdivision (b) requires brokers and salespersons to comply with the section and with the professional conduct regulations adopted under Business and Professions Code section 10080.

The booklet describes limits on the inspection: areas that are not reasonably accessible, areas off the site, and public records and permits. Those limits sit in sections after 2079 that were not read on a current text, and they appear in the closing section of this guide as open points. The same is true of the time limit for a claim.

Six natural hazard zones

A separate statement deals with where the land lies. Civil Code section 1103, read in a copy last updated on 1 January 2019, applies its article to the same list of transfers as the transfer disclosure statement, for "single-family residential real property", subject to exemptions in section 1103.1. As with section 1102, the terms take their meaning from the licensing law, and any waiver is void as against public policy under subdivision (d).

Subdivision (c) names six zones. The booklet lists the same six, but cites for each the statute that orders the disclosure; the copy of section 1103 cites the statute under which the zone is designated. The table gives the second set.

The article applies to a transfer only where the seller or the seller's agent is required to disclose one of these zones, and the duty arises in one of two ways for each zone. The first is actual knowledge that the property is inside it. The second is a posted notice: a list of parcels or a map has been provided to the local body, and a notice saying so has been posted at the offices of the county recorder, the county assessor and the county planning agency.

Fire maps themselves have been redrawn since 2005. The Office of the State Fire Marshal, on its fire hazard severity zone page in 2026, says its maps for state responsibility areas took effect on 1 April 2024 and that maps for local responsibility areas were released in four phases between 10 February and 24 March 2025. The page says nothing about sale disclosures.

Mello-Roos and other special tax liens

The notice of special taxes is in Civil Code section 1102.6b, the number the booklet gives, read in a copy last updated on 1 January 2019.

The section applies where a sale is subject to the transfer disclosure article and the property carries a continuing lien of one of three kinds: a special tax under the Mello-Roos Community Facilities Act; a fixed lien assessment collected in instalments to secure bonds under the Improvement Bond Act of 1915; or a contractual assessment under the Streets and Highways Code. The third kind is not in the 2005 booklet. The section does not apply where a notice is already required under Government Code section 53341.5.

The seller's duty, in subdivision (b), is to make a good faith effort to obtain a disclosure notice from each local agency that levies the tax or collects the assessment, and to deliver it to the prospective buyer, provided the agency makes the notice available.

A notice from a non-governmental source may be used instead, under subdivision (d), if it has the content the section lists. For a Mello-Roos tax that is the name of the entity, the tax for the current year, the maximum annual tax, the percentage by which it may rise each year, the date through which it may be levied and, where available, a telephone number.

Subdivision (e) sets the limit of the duty. Once the notice is delivered, the seller and the agent owe no further information about the tax and the district, and neither has a duty to discover a special tax, an assessment or a district they do not actually know of. The copy read states no termination period of its own for this notice and does not refer to section 1102.3. Whether a late special tax notice opens the three or five days is therefore left open here.

Association documents: now section 4525

For a home in a common interest development, the booklet cites Civil Code section 1368 and the Reference Book chapter cites section 1365. Neither number is where the duty sits in the code read in 2026. The seller's duty is in Civil Code section 4525, read in a copy last updated on 1 January 2026. The page read does not trace the renumbering, so this guide records only the present number.

Under subdivision (a), the owner of a separate interest provides a list of items to the prospective purchaser as soon as practicable before the transfer of title or the execution of a real property sales contract. The copy lists eleven:

1. The governing documents, or a statement that the association is not incorporated.
2. Where the documents restrict occupancy by age, a statement on the limits Civil Code section 51.3 sets on such restrictions.
3. The most recent documents the association distributed under the article of the code that starts at section 5300.
4. A written statement from the association of current assessments and fees, of amounts unpaid on the seller's interest, and of unpaid fines and charges that are or may become a lien.
5. A copy or summary of any notice alleging an unresolved violation of the governing documents.
6. The initial list of construction defects given to members under section 6000, unless the matter has been resolved.
7. The latest information given to members under section 6100.
8. Any change in assessments and fees that the board has approved but that is not yet due.
9. A statement describing any prohibition on renting or leasing in the governing documents.
10. If the purchaser asks, the approved minutes of board meetings for the previous 12 months, executive sessions excluded.
11. The report of the most recent inspection under section 5551.

The booklet's shorter description covers the first four items only. Subdivision (b) exempts an owner who is subject to Business and Professions Code section 11018.6. The booklet's statement that the association must supply the items within 10 days of a written request belongs to a neighbouring section that was not read, and stays an open point.

A death at the property

Civil Code section 1710.2 was read in a copy last updated on 24 September 2016. The three-year rule of the booklet stands.

Under the copy, no cause of action arises against the owner of real property, the owner's agent or the agent of the person acquiring it for failing to disclose the occurrence of an occupant's death on the property, or the manner of that death, where the death occurred more than three years before the date the person offers to purchase, lease or rent the property. The rule covers buyers, lessees and renters alike.

The second protected silence has been reworded since the booklet. The booklet speaks of an occupant "afflicted with, or who died from" Acquired Immune Deficiency Syndrome. The copy read speaks of an occupant who was living with human immunodeficiency virus or died from AIDS-related complications.

Two limits follow. Subdivision (c) says the section changes nothing in the law on disclosing other conditions and does not relieve an owner or agent of the duty to disclose the physical condition of the premises. Subdivision (d) removes the protection from an owner or agent who makes an intentional misrepresentation in answer to a direct question about deaths on the property. The section, as read, does not spell out the position for a death inside the three years.

The three-year rule protects silence about an old death. It gives no cover to an untrue answer when the buyer asks.

Withholding on the sale price: state and federal

Two entries in the booklet concern tax withheld from the seller's proceeds. One has held and one has not.

The state rate is confirmed. The Franchise Tax Board's "2026 Instructions for Form 593" give withholding of 3 1/3 per cent, written as .0333, of the sales price, under Revenue and Taxation Code section 18662, which is the rate and the section the booklet gives. The instructions say the real estate escrow person must notify the buyer of the withholding requirements, and that the form goes to the Board by the 20th day of the calendar month after the month in which escrow closes.

The instructions list the cases with no withholding: a sales price of US$100,000 or less, a property in foreclosure, a transferor that is a bank acting as trustee, and a seller who certifies an exemption on the form. The principal residence certification asks that the seller owned and lived in the property as a main home for at least two of the five years ending on the sale date. The booklet's threshold was a price "under" US$100,000; the 2026 wording is US$100,000 "or less".

The instructions also describe an alternative the booklet does not: withholding calculated on the estimated gain, at a rate set by the kind of seller.

The same instructions set penalties. Where the buyer is not given written notice, or does not withhold after notice, the penalty is the greater of US$500 or 10 per cent of the required withholding. A seller who knowingly signs a false certificate faces the greater of US$1,000 or 20 per cent of it.

The federal rate has moved. The booklet says that where the seller is a foreign person the buyer withholds 10 per cent of the gross sales price under the Foreign Investment in Real Property Tax Act. The Internal Revenue Service's page, reviewed on 21 July 2026, says the rate is generally 15 per cent of the amount realised, and that 10 per cent applied to dispositions before 17 February 2016.

What the booklet lists that was not re-checked

The 2005 booklet lists more than the rules checked above, and for these no current text was read. They are named so that the reader knows they exist; nothing in this section is the confirmed position in 2026.

• The layout of the transfer disclosure statement itself. The booklet describes five sections; the copy of section 1102.3 confirms only that Sections I, II and III exist.
• The effect of an expert's report on liability, which the booklet places in section 1102.4.
• The limits on the agent's inspection and the period for bringing a claim.
• The natural hazard form, the rule for doubtful maps, third-party reports and the timing of that statement.
• The supplemental property tax notice, which the booklet places in section 1102.6c.
• A run of narrower notices: former ordnance locations, window security bars, industrial use, methamphetamine contamination orders, smoke detectors, water heater bracing, the earthquake and environmental hazards guides, the sex offender database notice, the title insurance notice and structural pest control reports.
• The exemptions from federal withholding, which the booklet lists.

The booklet itself warns that laws change and that the cited statutes should be read. The copies read for this guide bear that out: the structure of California's disclosure law is the one the booklet maps, and several details have moved.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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