Sample language for Agent's Visual Inspection Statements & the TDS
Is AVID required in your state?
California Civil Code section 2079 requires both a buyer’s agent and a seller’s agent "to conduct a reasonably competent and diligent visual inspection of the property offered for sale and to disclose to [the] prospective purchaser all facts materially affecting the value or desirability of the property that an investigation would reveal…" The code specifies that it "does not include or involve an inspection of areas that are reasonably and normally inaccessible to such an inspection, nor an affirmative inspection of areas off the site of the subject property or public records or permits concerning the title or use of the property…"
In simple words, as real estate agents, we need to disclosure any 'red flags' that might affect the value of the property and/or buyers' desire to buy it.
Transfer Disclosure Statement is one of the most important disclosure documents that a seller gives to a buyer. This disclosure in CA can not be waved by a buyer, it is required from Seller to fill it up and deliver to a buyer ( stationary and contractual obligations to answer all the questions to their best knowledge), whether or not the seller is represented by an agent, on a transfer of a a residential 1-4 unit property, unless a specific exemption applies( REO, bankruptcy sales, from one owner to another, some trust sales, etc.)
There are some useful tips from David Ames on preparing your Agent Visual Inspection Statement.
Risk Management ... (and the TDS)
Sample Language for Agent's Visual Inspection Statement.
As much as I like to think I know it all, there's always something to be learned, (or at the very least..."reminded"), when it comes to disclosure and the infamous [TDS]Transfer Disclosure Statement (aka: the C.Y.A document!) Knowing what to say and more importantly, How to say it, can separate a clean form of disclosure from a potentially litigious one.
Here in California, Agents are required to do a visual inspection for each property they have in contract. This applies to the selling agent as well as the listing agent, and is sub-section of the seller's TDS form. Overkill? Perhaps. Regardless, it's mandatory. To make it fair, there are disclaimers on the AVIS (Agent's Visual Inspection Statement) form addressing the fact that it is a "visual" inspection only... with reference to the fact that the agent is not acting in an "expert" capacity. As such, the language we use when making note of defects, issues, or when giving recommendations, has to be worded carefully to avoid the appearance of acting as an "expert"...kind of like giving legal advice when you're not in a position to do so. A tightrope walk? You bet.
Some common examples are when you make note that there are cracks in the sidewalk, on the ceiling, or along the foundation. You simply say: "cracks noted on ceiling in living room (sidewalk, foundation near garage door, etc.). You DON'T say: "cracks noted along ceiling (sidewalk, foundation, etc.) due to settlement. Although that might be the logical explanation for what caused those cracks, you can't be certain. You just have to note what you see and leave it at that.
Here are a few sample statements agents can use (when appropriate) for providing additional disclosure in their visual inspections or supplemental TDS summaries. While some of these are more specific to San Francisco, the general concept is there and can be applied universally. Also, when I see something of particular interest that perhaps an inspector may have missed, I make it my duty to point it our to the client. While some of the statements below may appear to be "obvious" and more a matter of common sense, it's always better to assume that they're not so obvious.
_______________________________________________________
STANDARD AGENT TDS LANGUAGE:
A. Personal property may cover unknown damage, such as holes in finishes, or stains on wood floors or wall to wall carpet. Personal property was not moved to conduct this visual inspection. There may be areas that cannot be viewed as of this inspection including but not limited to sheds, cluttered areas, roof, crawl space, sewer laterals and fireplaces. Windows have not been tested to confirm that they are fully functioning.
B. Fitted carpets conceal floors in some rooms. The condition and type of floor is unknown.
C. Agent notes after artwork, furniture, drapes, and/or rugs are removed, defects such as cracks, stains, peeling,
nail holes, and areas of fading or discoloration may be apparent.
D. If this property contains a power operated garage door opener, buyers may feel or hear the operation of this
opener, which may affect their quiet enjoyment of the property.
E. In San Francisco, the concrete sidewalk flags in front of or surrounding a property are the building owner's responsibility. If they are cracked, lifted, buckled, or damaged in any way, the city can require immediate replacement at the building owner's expense.F. If buyers are interested in further developing or improving the property, they are encouraged to contact the (insert City) Planning and Building Departments to better understand the limitations or processes and whether it is possible to determine if they can develop, improve, or expand the property
G. Neither the seller nor the broker can guarantee that the view which exists today will remain unobstructed in the future.
H. Buyers are advised to contact the police department to check crime statistics in the neighborhood. San Francisco crime statistics can be found at www.sfgov.org/site/police. There may be other places where statistics can be found.I. Buyers are strongly encouraged to thoroughly read and understand "GENERAL INFORMATION FOR BUYERS AND SELLERS OF RESIDENTIAL REAL PROPERTY IN THE CITY AND COUNTY OF SAN FRANCISCO." This document covers many
pertinent topics and conditions that are relevant to purchasing a home in San Francisco.
J. Many sewer mains in San Francisco are old enough to have been constructed using ceramic material. Over time, this material is frequently subject to breakage from shifting or settling soil as well as earthquakes. Most plumbing companies offer a service that includes the videotaping of the line to determine if blockage or breakage exists and this type of inspection is recommended.
K. Materials used in the construction of fireplaces and related exhaust flues are frequently subject to breakage, as well as the accumulation of flammable residue. Buyers are encouraged to have an inspection to determine the usability of existing fireplaces.L. Many properties in San Francisco are located in densely populated and frequently traveled areas, and are subject to traffic, noise, the presence of homelessness and other common characteristics of urban life. Buyers are advised to visit the location of their intended purchase on
different days of the week and different hours of the day to determine if the location is suitable for them.
STANDARD AGENT TDS LANGUAGE FOR CONDOMINIUMS, T.I.C.'s, ETC.:M. If this property contains an elevator, or the building contains an elevator, buyers may feel or hear the operation of the elevator which may affect their quiet enjoyment of the property.
N. The subject property is a condominium and therefore owners will be members of a homeowners' association. Common areas and the building structure are owned with other association members/condominium owners. Repair or replacement of building components requires neighbor cooperation. In a common living situation such as this, noise between units is common and to be expected. (If applicable).
Comments(22)