A California residential purchase agreement defines the terms and conditions of a real estate transaction between a buyer and a seller. This document includes the property description, purchase price, financing options, earnest money deposit, closing date, and necessary inspections.
The agreement helps prevent disputes and facilitates a smooth closing process by clearly specifying each party’s responsibilities and expectations. The document becomes legally binding once both parties fully agree on the terms and sign it.
State Laws
- Death on Premises: Landlords must inform prospective buyers if a death occurred in the unit within the past three years, except if the death was due to HIV or AIDS-related complications. [1]
- Notice of “Supplemental” Property Tax Bill: Requires the seller (or their agent) to inform buyers that upon ownership transfer, they may receive supplemental tax bills. It must be included in writing and distributed to all prospective buyers, formatted in 12-point font within the lease agreement with a 14-point font title. [2]
- Local Option Real Estate Transfer Disclosure Statement: Depending on the city or town where the real estate transaction takes place, a local transfer disclosure statement with specific community and neighborhood details may be necessary. [3]
- Megan’s Law: From April 1, 2006 onwards, every purchase agreement must include a notice informing buyers about their ability to research registered sex offenders in the area using a provided website link. [4]
- Water-Conserving Plumbing Fixtures and Carbon Monoxide Detector Notice: This notice confirms the property’s compliance with state laws on water-conserving plumbing fixtures and carbon monoxide detectors, including updates on fixture replacements and detector status. [5]
- Water Heater and Smoke Detector Statement of Compliance: This disclosure confirms that the property’s water heater is earthquake-braced and has the required number of operable smoke detectors, complying with state law. [6]
- Title Insurance: In escrow transactions without title insurance, the buyer must receive a separate notice stating the importance of obtaining it. The notice advises about potential prior liens and encumbrances affecting the property and requires the buyer’s acknowledgment of these risks by signing the notice. [7]
- Military Ordnance: If the seller knows the property is within one mile of a former military training area possibly containing live ammunition, they must give the buyer written notice of this fact. [8]
- Methamphetamine Contamination: Before selling a property contaminated by methamphetamine production chemicals, the seller must provide the buyer with any health officer’s order prohibiting use. The buyer must acknowledge receiving this notice in writing. [9]
- Community Facilities District (CFD): If the property falls within a Mello-Roos district, the seller or their agent must obtain and deliver a “Notice of Special Lien” from each local agency imposing a special tax. This is required only if they are aware of any such taxes on the property. [10]
- Industrial Uses: Before transferring the title, if the seller knows that the property is adjacent to industrial use or zoned for industrial purposes, they must disclose this information to the buyer. [11]
- Seller Property Questionnaire: When using the Residential Purchase Agreement and Joint Escrow Instructions form, the seller must complete the SPQ document and provide it to the buyer along with the property disclosure statement.
Realtor Version
Residential Purchase Agreement and Joint Escrow Instructions
This version of the California Association of Realtors establishes the terms and conditions for a residential real estate transaction.
Required Seller Disclosures
If a buyer doesn’t receive the required disclosures, they can terminate the agreement within three days (or five if mailed) by notifying the seller or their agent. [12]
Lead-Based Paint Disclosure
According to federal law (42 U.S. Code § 4852d), sellers must provide a lead-based paint disclosure statement to potential buyers for properties built before 1978.
Transfer Disclosure Statement (TDS)
Sellers must fill out this document on the property's condition. Although it isn't a warranty, buyers can refer to it for negotiating terms while still performing their inspections (CIV § 1102 et. seq.).
Environmental Hazards Pamphlet
Sellers can provide this pamphlet, which legally absolves them of any further obligation to disclose environmental hazards to potential buyers (CIV § 2079.7).
Homeowner’s Guide to Earthquake Safety
In addition to disclosing any earthquake-related property deficiencies, the seller must also provide the buyer with a copy of the referenced earthquake guide (CIV § 2079.8 and § 2079.9).
Wood Destroying Pests and Organisms Inspection Report
If it's a condition of the purchase agreement or necessary for financing, the seller must provide a copy of a pest control inspection report indicating the presence of wood-destroying organisms (CIV § 1099 and BPC § 8519).
Natural Hazard Disclosure Statement (NHDS)
The seller must complete this statement if the property is situated near any natural hazardous area - flood hazard areas, high fire hazard zones, designated wildland areas, earthquake fault zones, and seismic hazard zones (CIV § 1103).
Do Sellers in California Have to Disclose Property Defects?
Yes, sellers in California are required to disclose any material defects that could affect the property’s value or desirability. This ensures transparency and protects buyers from unforeseen problems.
In contrast, some states follow the “caveat emptor” principle, where the buyer is responsible for identifying property defects through their own inspections. That means buyers who do not thoroughly investigate the property may not have legal recourse to reverse the transaction based on undisclosed defects.
