Reading Disclosure Packages
Most disclosure packages in San Francisco are prepared and presented to interested buyers so they can review these disclosures prior to writing an offer. There is a lot of important information in these packages, and although some of them look big and imposing (especially for some condominiums), it is important to read all of the documents. If you have any questions while you are reading, note them and be sure to discuss any questions or concerns with your agent.
Most of the documents fall into two categories: property specific disclosures and disclosures and advisories that pertain to local, state and federal ordinances.
Property Specific Disclosures include (but not limited to):
The Sellers Transfer Disclosure Statement (also known as the TDS): Here Sellers are required to present a complete and accurate picture of the condition of the property including information about things that are not working properly, repairs and renovations that have been made during their ownership of the property (and whether these were done with permit), and other items that may impact the market value or a buyers use or enjoyment of a property (for example, listing if a cat lived in the property in recent years is an important disclosure to someone who may be allergic to cats).
Supplement to the TDS: This is a San Francisco based supplement which asks the Seller questions that have to do with information important to living in San Francisco. It includes sections for TICs and stock cooperatives (that are not widespread in other parts of the state), information specific to tenant occupied properties, etc.
Report of Residential Record (commonly known as the “3R” Report): This is a San Francisco report that includes information about the building, including when it was built, its original and current use, the work done on the property (obviously, only work done with permits issued by the city will show), the status of these permits (completed, expired or no record), the number of units in the building, etc. These reports are produced upon request and for a fee. City workers create this report manually, so it may be prone to errors (and of course, one of the advisories that is normally in a disclosure package).
Natural Hazards Disclosure Report (sometimes called “the JCP”) presents information about, well, natural hazards. It also includes information about man-made hazards including the location of nearby storage tanks that may be leaking. Not natural hazards, but perhaps hazardous to nature?
Condo Documents including CC&Rs, budgets, minutes from homeowners’ association meetings.
Other advisories and disclosures you will find in a disclosure package include smoke detector and water heater advisories, lead based paint warnings, information about the San Francisco Underground Storage Tank ordinance, Buyers Advisories, including the Buyers Inspection Advisory. This one is really important. It advises you about the importance of having inspections and discusses several of the types of inspections you can have when purchasing a home.