If you are selling a house, condo, or building of one to four residential units in San Diego, California law requires you to tell buyers what you know about the property’s condition. The core form is the Transfer Disclosure Statement (TDS) under Civil Code 1102, paired with a Natural Hazard Disclosure. The rule is simple to state and easy to get wrong: you must disclose known material defects, honestly and in writing.
What the Transfer Disclosure Statement (TDS) is
The Transfer Disclosure Statement is the standardized form California requires from sellers of one to four residential units. It comes from California Civil Code Section 1102 and is mandatory for most resales — you cannot waive it, and an “as-is” sale does not get you out of it. The TDS walks you through the home system by system and asks you to report what you are aware of.
The form is organized into sections. You list the appliances and systems that exist and whether they work (the range, dishwasher, water heater, HVAC, smoke and carbon-monoxide alarms, water-heater bracing, and so on). You answer whether you are aware of significant defects or malfunctions in major components — roof, foundation, slab, interior and exterior walls, electrical, plumbing, insulation, windows, doors, and drainage. Then you answer a list of yes/no questions covering things like additions or alterations made without permits, settling or soil problems, drainage or grading issues, flooding, room additions, neighborhood nuisances, shared fences or walls, and any lawsuits affecting the property.
Two things make the TDS different from a sales pitch. First, you sign it under penalty of perjury that the information is true to the best of your knowledge. Second, it travels with the deal and becomes part of the permanent record of the transaction. If a problem surfaces later, this is the document everyone reads first.
The “known material defect” standard, in plain English
The single most important phrase in California disclosure law is known material defect. Break it into two parts.
- Known means something you are actually aware of. You are not required to tear open walls or hire experts to manufacture knowledge you do not have. But you cannot play dumb about things you have lived with — the slow drip under the kitchen sink, the bedroom that floods when it rains hard, the panel a previous electrician told you was a problem.
- Material means it would matter to a reasonable buyer’s decision to buy or what they would pay. A hairline cosmetic crack is one thing; a foundation movement issue is another. When in doubt, disclose — under-disclosing is where sellers get into trouble, not over-disclosing.
A crucial point that surprises many sellers: “as-is” does not remove your duty to disclose. Selling as-is means you are not promising to make repairs. It does not mean you can stay silent about defects you know exist. You still complete the TDS, and you still answer honestly. The same is true of past repairs — if you fixed a leak or patched a foundation crack, that history is often material and should be disclosed.
The Natural Hazard Disclosure (NHD)
Alongside the TDS, California requires a Natural Hazard Disclosure statement telling the buyer whether the property sits in any of the state-designated hazard zones. In San Diego County, several of these are very much in play:
- Special flood hazard areas and areas of potential flooding — relevant near coastal lagoons, river valleys, and low-lying inland basins.
- Very high fire hazard severity zones and state fire responsibility areas — a real consideration across San Diego’s wildland-urban interface, from inland canyons to the back-country foothills.
- Earthquake fault zones and seismic hazard zones, including areas prone to liquefaction or landslide.
Most sellers buy an NHD report from a third-party company rather than figuring out the zones themselves, and that report is what gets delivered to the buyer. Even so, you are still responsible for disclosing what you personally know — if your street floods every El Niño year or your hillside lot has a history of movement, that belongs on your disclosures regardless of what a hazard map says.
The other forms that usually ride along
The TDS and NHD are the headliners, but a typical San Diego sale also includes several companion disclosures. Expect to address lead-based paint for homes built before 1978 (a federal requirement), a Megan’s Law database notice, and a general statement on environmental hazards. If the property is in a homeowners association, the buyer is entitled to the HOA governing documents and financials, and condo sellers should be aware of balcony-inspection rules under SB 326 — see our guide to buying a condo in San Diego and HOA SB 326 obligations. Your agent or transaction coordinator will assemble the full packet, but you are the one signing for the property-specific answers.
How a pre-listing inspection helps you disclose accurately
Here is the bind every honest seller faces: you are required to disclose what you know, but you are not a roofer, an electrician, or a foundation specialist. You can only report the condition you are genuinely aware of. A pre-listing inspection closes that gap by converting vague worry into documented fact.
When you order a seller’s inspection before listing, a licensed inspector walks the same visual, non-invasive scope a buyer’s inspector would and hands you a written report with photos. Now your TDS answers are grounded in something concrete instead of a guess. You can describe the roof’s actual condition, note the panel the inspector flagged, and disclose the drainage observation in specific terms — which is exactly the kind of honest, detailed disclosure that protects you. For more on why timing matters, read our breakdown of the pre-listing inspection for San Diego sellers.
One warning: a pre-listing inspection only helps if you actually disclose what it finds. If you order a report, learn about a defect, and then leave it off your TDS, you have created written proof that you knew. The report is a shield when paired with disclosure and a liability when buried. Once you have a report, the smart play is to fix the cheap safety items and disclose-and-price the big ones — our guide to seller repairs after an inspection walks through that decision.
Why honest disclosure is your best protection
California disclosure law exists to prevent post-sale lawsuits, and accurate disclosure is your strongest defense against them. A buyer who was told about an aging roof and bought anyway has a hard time claiming you concealed it. A buyer who discovers an undisclosed problem you clearly knew about has a straightforward claim. The TDS is signed under penalty of perjury for a reason — the consequence of a deliberate omission can far exceed the cost of the repair you were trying to avoid.
Disclosure forms are legal documents, and this article is general information, not legal advice. For how the rules apply to your specific sale, talk to your real estate agent and, for anything contested, a real estate attorney.
The Real Estate Inspection Company inspects homes and commercial property across all of San Diego County. Owner and lead inspector Joseph Romeo is an InterNACHI Certified Professional Inspector (CPI) and holds CSLB General Contractor License #1113143. Planning to list and want to disclose with confidence? Call (619) 752-4399, email joe@sandiegohomeinspection.com, or reach out through our contact page.
