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What are disclosure requirements for commercial real estate?

On Behalf of | Jun 8, 2021 | Firm News

Disclosures in real estate tell a potential buyer about issues or areas of concern that relate to a property. For example, a disclosure may let a buyer know the property contains lead paint.

There are some required disclosures in California for commercial properties. If you want to sell, you need to ensure you provide the proper disclosures or you could face problems down the road. The California Association of Realtors explains commercial disclosure requirements are almost the same as residential requirements in the state.

A good rule

A good rule to follow with disclosures to avoid legal trouble is to disclose everything possible. It is usually better for you to tell buyers about any and all issues and let the buyer make an informed decision. If you hold something back, there is potential for the buyer to use that at a later date against you in court for a claim of fraud or something similar.

Common disclosures

There are some disclosures your buyers will expect to see. These are common issues with properties that will usually not harm the sale. Although, there is the potential a buyer may walk away due to something you disclose, but if it is a requirement, you must make the buyer aware.

Some of the traditional disclosures include telling a buyer if the property is in an area the floods regularly or informing about mold in a structure. You may also disclose if the property is on a fault line or if the area has some other designation, such as a Very High Fire Hazard Severity Zone.

Disclosures are about honesty. They allow you to tell a buyer about issues with the property so you do not have to assume liability for them.