California Agency and Disclosure Law
California requires specific agency and property-condition disclosures in residential transactions. This chapter covers the agency disclosure (AD) form, the Transfer Disclosure Statement, and dual-agency limits.
The Agency Disclosure (AD) Form
In residential sales of one to four units, the agent must provide the buyer and seller the statutory Disclosure Regarding Real Estate Agency Relationships (AD form), explaining whether the agent represents the seller, the buyer, or both as a dual agent, and the duties owed. It concerns representation, not valuation or financing, and must be given at the statutory times.
The Transfer Disclosure Statement (TDS)
The TDS, required in most sales of one-to-four residential units, requires the seller to disclose the property's condition and known material defects, and the agents to note items observed from a reasonably competent and diligent visual inspection. It protects buyers and cannot be waived where required.
Dual-Agency Limits
A California dual agent owes fiduciary duties to both parties but may not, without express written consent, disclose one party's price negotiating position to the other, such as that the seller will take less or the buyer will pay more. The dual agent may still present offers, explain the AD form, and recommend inspections. Dual agency is legal only with disclosure and consent.