California Seller Disclosure: Complete TDS Guide for Buyers
The Transfer Disclosure Statement is your most important document when buying a home in California. Here's how to read it like a pro.
If you're buying a home in California, you'll receive a stack of disclosure documents from the seller. The most important one is the Transfer Disclosure Statement (TDS), required under California Civil Code §1102. It's the seller's sworn statement about what they know about the property's condition.
Most first-time buyers skim through it. That's a mistake. The TDS is where sellers reveal — or fail to reveal — problems that can cost you tens of thousands of dollars after closing.
What Is the TDS?
The Transfer Disclosure Statement is a standardized form (typically the California Association of Realtors form, or the statutory version) that requires the seller to answer specific questions about the property's condition, systems, and history. It covers structural components, plumbing, electrical, HVAC, roof, foundation, environmental hazards, legal issues, and more.
The form has three sections:
- Section I — Seller's disclosure. The seller answers questions about the property based on their personal knowledge. This is the most important section.
- Section II — Agent's inspection. The listing agent reports on visible defects they observed during their inspection of the property.
- Section III — Buyer's agent inspection. Your agent reports what they observed. This often has less detail than the seller's section.
Key point: The TDS is a good-faith statement, not a warranty. The seller discloses what they know, not what a professional inspector would find. That's why you always need your own independent inspection — and why comparing the two documents is so valuable.
What Sellers Must Disclose in California
California has some of the most comprehensive disclosure requirements in the country. The TDS asks sellers about dozens of specific items, organized into categories:
Structural and Systems
- Roof condition and any known leaks (current or past)
- Foundation condition, settling, cracks, or movement
- Plumbing system type (copper, galvanized, PEX), any known issues
- Electrical system capacity, any known problems, panel type
- HVAC system condition, age, and maintenance history
- Water heater type, age, and condition
Water and Environmental
- Any history of flooding, drainage, or grading problems
- Any known water damage, past or present
- Any known mold or mildew issues
- Lead-based paint (required for pre-1978 homes by federal law)
- Asbestos, radon, or other environmental hazards
- Whether the property is in a natural hazard zone (earthquake, fire, flood)
Legal and Neighborhood
- Any boundary or property line disputes
- Any easements, encroachments, or shared driveways
- Whether any work was done without permits
- Any HOA restrictions, CC&Rs, or pending assessments
- Any deaths on the property within the past 3 years
- Any neighborhood noise, nuisance, or environmental concerns
Red Flags to Watch For on the TDS
Excessive "Don't Know" Answers
A seller who lived in the house for a decade and checks "Don't Know" for whether the basement has ever flooded is either not paying attention or strategically avoiding disclosure. A few "Don't Know" answers are normal. A pattern of them is a warning.
Vague Language
"Some minor settling" could mean hairline cracks in drywall or it could mean the foundation is actively moving. "Previous water issue, resolved" could mean a spilled glass of water or a major flood remediation. Push for specifics on any vague answer.
Recent Repairs Without Context
If the seller discloses recent work — new paint in the basement, recent roof patches, fresh drywall in certain rooms — ask why. Cosmetic repairs sometimes cover up underlying problems. A freshly painted basement wall might be hiding water staining.
Mismatches Between Sections
Compare the seller's answers (Section I) with the agent's inspection notes (Section II). If the seller says "no roof issues" but the listing agent notes "aging roof with visible wear," that's a mismatch worth investigating.
California law note: Once you receive the TDS, you have 3 days (if delivered in person) or 5 days (if sent by email or mail) to cancel the contract based on what you learn. This clock starts when you receive the document, so review it immediately.
Beyond the TDS: Other Required Disclosures
The TDS isn't the only disclosure document you'll receive. California also requires:
| Document | What It Covers |
|---|---|
| Natural Hazard Disclosure (NHD) | Earthquake fault zones, flood zones, fire hazard zones, landslide areas |
| Supplemental Property Tax Notice | That property taxes may be reassessed after sale |
| Lead-Based Paint Disclosure | Required for all pre-1978 homes (federal law) |
| Mello-Roos / Special Tax Disclosure | Any special tax assessments on the property |
| Seller Property Questionnaire (SPQ) | Additional questions about neighborhood, insurance claims, pets, deaths |
| Agent Visual Inspection Disclosure (AVID) | Agent's visual observations of the property |
Each of these documents adds a piece to the puzzle. Read them all, and look for contradictions between them. If the TDS says "no flooding" but the NHD shows the property is in a FEMA flood zone, that's worth questioning.
Your Rights as a California Buyer
California law strongly protects buyers when it comes to disclosure. If a seller knowingly misrepresents the condition of the property on the TDS, you have legal recourse — potentially even after closing. Remedies can include rescission of the sale (undoing the transaction) or damages to cover the cost of undisclosed defects.
But prevention is better than litigation. The best time to catch disclosure problems is during your contingency period, when you can negotiate, request repairs, or walk away with your earnest money intact.
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