Life is good. Escrow has opened. Your buyers are happy. The deposit is in, and the home inspection went really well.
And then you learn that the house across the street is a licensed alcoholism and drug abuse recovery facility -- in the vernacular, a "sober living home" -- that serves a maximum of six people. Is this something that you are required to disclose to the buyers?
More than a couple of agents might be surprised by that answer. A memorandum, Disclosure Issues Related to Residential Care Facilities (revised March 7, 2014), provided by the legal department of the California Association of REALTORS®(CAR) provides some explanation.
First of all, it is noted that it has been the express intent of the California Legislature not only to permit but also to encourage the development of sufficient numbers of such facilities. Moreover, under California law, these properties "must not be subject to any business taxes, local registration fees, use permit fees, or other fees to which other single-family dwellings are not likewise subject… Furthermore, whether or not unrelated persons are living together, an alcoholism or drug abuse recovery or treatment facility which serves six or fewer persons must be considered a residential use of property…" (California Health and Safety Code 11834.22) "In addition, the residents and operators of such a facility must be considered a family for the purposes of any law or zoning ordinance which relates to the use of property pursuant to this article."
So, what does all this mean with respect to disclosure duties? The analysis is two-fold.
1. There certainly is an affirmative duty to disclose the existence of a nuisance affecting the property. However, the existence of such a facility cannot in and of itself be considered a nuisance. By law (Civil Code Section 3482) "Nothing which is done or maintained under the express authority of a statute can be deemed a nuisance." These recovery facilities exist under the express authority of statutes. Hence, they, themselves, cannot be considered a nuisance.
(If there were constant loud noises or traffic problems, those could be considered nuisances and should be disclosed. But that is another matter.)
2. Shouldn't the existence of a nearby recovery facility be considered a material fact that ought to be disclosed? This question was considered by an Attorney General Opinion (No. 89-902) issued in March of 1990. In that opinion, State Attorney General, John K. Van De Kamp, wrote "…we conclude that the location of a licensed care facility is not a material fact required to be disclosed under California law."
After all, the Health and Safety Code has determined that "a residential facility which serves six or fewer persons shall be considered a residential use of property and a use of property by a single family." A residential use of property by a single family cannot be considered a material fact adversely impacting a neighboring property.
If there is not, then, a duty to disclose the nearby existence of such a facility, might it at least be acceptable to volunteer such information? The CAR memorandum counsels caution in this regard. It points out that both alcoholism and drug addictions (if not currently using) are considered to be handicaps under the law. Volunteering information could be considered discriminatory.
And what about responding to an inquiry? The Attorney General opinion put it this way:
While it is doubtful that a real estate agent could volunteer information concerning the location of a licensed care facility without violating state or federal law, disclosure in response to an inquiry would be permissible if it is factual, not intended to foster discrimination against or segregation of licensed care facilities within a community, and in fact does not have that effect. [my emphasis]
Be careful out there.