Transfer Disclosure Statements (TDS)
A Transfer Disclosure Statement is required in the sale of one to four residential units as well as transfers by exchange, installment land sale contracts, leases with an option to purchase, options to purchase, or ground leases coupled with improvements. See Civil Code Sections 1102.
Transfers of property that are exempt include new home sales requiring a public report, transfers pursuant to court order such as probate sales, transfers by foreclosure including deeds in lieu of foreclosure, and transfers by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust. When a property is held in a revocable living trust and the trustee is a natural person who is the sole trustee of the trust as well as the former owner of the property, or an occupant in possession of the property within the year preceding the transfer, a TDS is required.
Other exemptions include transfers from one co-owner to another, transfers to a spouse, child , grandchild, parent, grandparent or other direct ancestor or descendant; transfers between spouses in connection with the dissolution of the marriage, and transfers to the state for failure to pay property taxes.
For most residential transactions in California, the seller is required to complete and provide the buyer with a Real Estate Transfer Disclosure Statement (TDS).
The required disclosures are extensive. There is no substitute for reading the Real Estate Transfer Disclosures Statement form. Note that the California Association of Realtors may update the form at any time so it is always wise work with a Realtor who has access to the most current forms and documents.