The disclosure laws in California vary, and to which a property owner must adhere depends on several factors, including the type of property in question and whether the property owner wishes to lease or sell. Moreover, the state treats leases with an option to purchase and ground leases as sales transactions, which further affects disclosure requirements. For yours and other realtors’ convenience, the California Association of Realtors details disclosure requirements for commercial transactions via a chart.
If you own a commercial property built prior to 1979, you must reveal to tenants the contents of an asbestos report. If the building does contain asbestos-containing materials, you must inform tenants of the location of the materials and educate them on how to prevent or minimize release, disturbance or exposure.
As a commercial property owner, you must also state on every lease whether or not a Certified Access Specialist has inspected your property and, if so, whether the property meets all relevant construction-related accessibility standards for the disabled. If there is no CASp report, you must indicate this in the lease. If there is such a report, you must deliver it to the prospective tenant 48 hours in advance of execution of the lease. Otherwise, the tenant has the right to cancel the lease within 72 hours of execution.
When it comes to material facts, you must only disclose a condition if it is “dangerous.” The courts may consider your failure to do so as fraud.
You also have the duty to reveal to future tenants whether past tenants used chemicals known to cause birth defects, cancer or other reproductive harm in the building. If so, you must post a list of the chemicals and the harms they cause for future building occupants to see.
Though not a disclosure requirement, California law requires you to equip your commercial properties with water-conserving plumbing systems prior to leasing them. You must also ensure that your building has enough fire alarms to comply with building and safety codes.
This article is for educational purposes only. It should not be used as legal advice.