How to Read San Francisco Real Estate Disclosures
So, you’ve begun searching for a house, and you are probably wondering: what do I do now? Before anything else, allow us to extend a congratulations! Buying a house can be exciting yet stressful, and getting started is often incredibly difficult. At Atlasa, we understand that several steps go into buying the right house for you that might be confusing, complicated, or tiresome to work through, and thus, we are here to help. If you would like to connect with an Atlasa agent, we can be easily reached at www.atlasa.com or by email at deniz@atlasa.com.
Perhaps you’ve experienced this scenario before: you express interest in a home after going to an open house and are sent a 300+ page disclosure package. This package seems to come with endless documents with endless information, and soon enough, you are drowning in technical speak and forms that only get harder to read with every page. Each document seems important, providing information about the house that you probably want to know. However, in the midst of the 27th page, you might ask yourself: what do you really need to read and understand about a house before spending the next eight hours reading through every document word for word?
This abridged explanation of disclosures in San Francisco should help you figure that out or help you find us so that we can help you out. Let’s start from the beginning:
What are Disclosures?
Disclosures are documents put together by the listing team and sellers to disclose all of the known information about the property. Disclosure packages include inspection reports, advisories, floor plans, compliance documents, and anything else the seller or agent has provided.
Reading through these documents is a crucial part of buying a house to understand the property’s condition, which may not be known or seen during open houses or showings. Sellers can disclose quirks that the property may have, previous fixes, and renovations done during their period of ownership.
Notable Documents within a Disclosure Package
San Francisco Seller Disclosure
Within this document, the sellers are to legally disclose everything known about the property. While very similar to the Transfer Disclosures, this document is filled with more information. Like the Transfer Disclosure, it is important to read to see if there are any additional features or quirks about the property that inspectors may not be able to note. The San Francisco Seller Disclosure covers the following:
- Statutory and General Disclosures
- Neighborhood Conditions
- Property Conditions, Past and Present
- Inspections, Reports, Notices, Plans, and Disclosures
- Eviction History
- Common Law Disclosure
Within some sections, boxes may be checked yes or no by the seller and will have additional notes in the addendum to explain the reasoning for that answer. Similar to the Transfer Disclosure, while legally required, this disclosure could be sparse.
Underground Storage Tank (UST) Report
This report is not a mandatory document that needs to be provided in a disclosure package in San Francisco, but its relevance can be quite important. This inspection report is done to determine if an Underground Storage Tank (UST) is below the subject property. These tanks are filled with petroleum or gasoline and can leak, making them a Leaking Underground Storage Tank (LUST). It can be quite costly to remove the tank (upwards of $300K), and if leaking, the tank can contaminate the soil.
If this report is not provided, it is possible to get an inspection done quickly. If not, another great resource to use is the California GeoTracker website. This site can be used to ensure that there are no leaking tanks in the nearby vicinity.
3R Report
This document provides a quick snapshot of what permits were pulled for this property and includes a status to show if it has been completed. This report is only found in San Francisco; other permits not listed can be found on the SFDBI website. Other cities won’t have it in this format but will have their own permit lookup websites.
A good example of a 3R report can be found below:
What each status means:
- A “C” or “Completed” status means that the work has been completed with a final inspection by the city.
- An “I” or “Issued” status means that a permit was issued, and the work is to have a final inspection to change to a completed status.
- An “X” or “Expired” status means that a permit was issued and expired before the work had a final inspection.
Water & Energy Compliance
As of September 20th, 1982, San Francisco requires owners who wish to sell their property to get a water and energy inspection and obtain a certificate of compliance. This is to protect natural resources and cut greenhouse gas emissions through reduced energy and water use. It is important to note that a compliance certificate must be provided to the buyer before the title transfer.
It is good to know that this document is not required if:
- Proof of compliance has already been recorded.
- The building was granted a building permit for construction on or after July 1st, 1978.
Concluding Thoughts
Overall, buying a house is a complicated and confusing process that can make a buyer feel overwhelmed and anxious. With a load of paperwork to review and process, not everyone feels up to the task. What is most important in the buying process — and what Atlasa aims to do with all its clients — is that one is informed and confident in their decision. All these forms, disclosures, and documents are meant to give a buyer everything they need to know and then some. At Atlasa, we understand the difficulty of going through this process yourself, and thus, we aim to help clients through it all. To read more on disclosures on a state level, check out our article on California Disclosures, which addresses the Bay Area as a whole and is not limited to San Francisco. To learn more about Atlasa or to get in contact with an Atlasa agent, visit www.atlasa.com or email deniz@atlasa.com.
