The California purchase agreement contains all the provisions, disclosures, and general information needed to secure a binding contract. Agreements typically require an earnest money deposit from the buyer before the closing date. The form should stipulate all financing related to the exchange to prevent disputes over payment.
Required Disclosures
Community Facilities District (CFD) (§ 1102.6b(b)) – If the property being sold is located within a district that is classified as Mello-Roos, the seller is obligated to provide a disclosure notice to the buyer regarding any special tax information that is related to the area.
Environmental Hazards Guide for Homeowners, Buyers, Landlords, and Tenants (§ 2079.7) – Sellers/Agents may supply this informative booklet to buyers in order to avoid having to provide additional disclosures regarding environmental hazards (as it is considered sufficient data).
Fire Detector Compliance Statement (§ 13113.8(b)) – This statement must be supplied to a prospective buyer that is interested in purchasing a single-family home. They must then endorse the form confirming that the seller is in compliance with California’s fire detector laws.
Homeowner’s Guide to Earthquake Safety (§ 8897.1) – Along with disclosing any deficiencies that property may have pertaining to earthquakes, the transferor shall also provide the transferee with a copy of the aforementioned guide.
Lead-Based Paint Disclosure (42 U.S. Code § 4852d) – Falling under federal law, any home that was constructed earlier than 1978 must come with a disclosure upon the transfer of the property that includes any data concerning the presence of lead on the premises as well as educational materials that communicate the risks involved with coming into contact with the harmful substance.
Local Option (§ 1102.6a) – Some cities and counties within California demand that a secondary disclosure form is fulfilled regarding the data that is specific to the community that the property is located in. The generic form is available in PDF or Word (.docx).
Megan’s Law (§ 2079.10a(a)(3)) – All purchase agreements for residential properties in the state of California must include the “Megan’s Law” clause regarding sexual offenders.
Methamphetamine (§ 25400.28) – If an individual is looking to sell a residential property that has been contaminated by the hazardous chemicals used to create methamphetamine, they must first deliver the prospective buyer with a pending notice while awaiting confirmation of the property being deemed safe to inhabit. (Buyer must provide written acknowledgment that they received the notice.)
Military Ordnance (§ 1102.15) – Individuals selling a property that is located within the vicinity of a military base/facility are obliged to furnish the purchasing party with a written disclosure establishing its position in relation to the residence.
Natural Hazard Disclosure Statement (NHDS) (§ 1103) – The seller or their agent is responsible to submit a disclosure form to the buyer that informs them of any potential natural hazards that pertain to the residence under contract. The form linked above includes the following state-mandated disclosures:
- Delineated Earthquake Fault Zone (§ 2621.9)
- Potential Flooding Area (§ 8589.4)
- Seismic Hazard Zone (§ 2694)
- Special Flood Hazard Area (§ 8589.3)
- Very High Fire Hazard Severity Zone (§ 51183.5)
- Wildland Fire Zone (§ 4136)
New Home Insulation (16 CFR § 460.16) – Only applicable for “new home sellers”, this federal code demands that the transferor disclose the type, R-value, and thickness of the insulation that will be installed into the property during construction.
Notice of Your “Supplemental” Property Tax Bill (§ 1102.6c) – This disclosure requires the seller (or their agent) to provide the buyer with a notice that contains a statement indicating that the transferee may receive supplemental tax bills upon the transfer of ownership.
Structural Pest Control Report (§ 1099) – If included in the sales contract, the seller is obligated to provide the buyer with a report concerning the inspection of any structure-damaging pests or organisms.
Title Insurance Advisory Notice (§ 1057.6) – If the buyer does not retain a title insurance policy during an escrow transaction for the purchase of a residential property, they must be issued a notice stating the following paragraph:
“IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING.”
Once received, they must sign the notice confirming that they fully understand the risks involved.
Transfer Disclosure Statement (TDS) (§ 1102.4) – The seller is compelled by law to supply the prospective buyer with a completed disclosure form that provides important details concerning the property being sold. The following demanded disclosures may also be included within the form:
Water Heater Compliance Statement (§ 19211(b)) – Sellers of real property must certify, in writing, that the water heater contained within the property is properly secured to prevent displacement in the event of an earthquake. (The form linked in the title also contains the Fire Detector Compliance Statement.)
Realtor Version
California Association of Realtors – PDF (sample form)