Do residential real estate transactions need yet another layer of disclosures? Directors of the California Association of Realtors® (CAR) answered "yes" at their recent triennial meeting held in Monterey, California. By more than a 2/3 majority, the directors voted to end the (potentially infinite) debate, discussion, and proposed refinement of a new disclosure document that had been brought to them last year for consideration. Their vote cleared the way for the form, the Seller Property Questionnaire (SPQ), to be released in April of this year.

Currently, the typical residential real estate transaction in California includes the giving and receiving of at least six disclosure documents. These include, but are not limited to, Agency Disclosure, the Transfer Disclosure Statement, Natural Hazards Disclosure, an Environmental Hazards Disclosure Booklet (including sections on asbestos, lead paint, seismic hazards, and mold), a Supplemental Statutory Disclosure, and lengthy advisories to both buyer and seller. Moreover, these standard forms are usually supplemented by local area disclosures (often prepared by the local Realtor® association) and proprietary disclosures provided by the brokers in the transaction. It’s fair to wonder, "why another?"

Of the many disclosures noted above, many of them do not actually supply information about the particular property that is being transferred. Most of them discuss conditions and items (e.g. the presence of asbestos or radon gas) that may or may not be present or relevant to the subject of the transaction. The disclosure document that is most specifically designed to provide information about the subject property is the state-mandated Transfer Disclosure Statement, commonly known as the TDS.

Over the years, experience has shown the TDS to be deficient in at least two respects. (1) Although apparently comprehensive, it leaves out a wide range of topics that have been found to be of significance to buyers. (2) It asks questions about the present condition of the property, whereas it is often the case that a purchaser may reasonably want to know about past conditions as well.

Many of the local and broker disclosure forms that are in use represent attempts to supplement the TDS in those areas where it has been found wanting. In large part, the creation of the SPQ represents an attempt to distill from those forms the questions and concerns that generally had relevance throughout the state, and to provide a standard document that would help all parties to the transaction (including brokers and agents) be informed and clear about matters that might be considered material.

The SPQ is a three-page document encompassing 35 questions (plus "other") grouped into 12 categories. It has been "whittled down" from the four-page, 51 question document that was presented last year. Like its earlier version, and like the TDS, it asks the seller about items of which he is aware. Thus, it implicitly -- and correctly -- acknowledges that there may be adverse conditions, such as a leak, that the seller simply may not know about.

Most significantly, the SPQ asks its questions with reference to the past. Not only "Do you have any problems?", but also, "Did you have a problem that you fixed?" [This is not a literal quotation from the document.]

Many of the CAR directors looked upon the SPQ favorably, because they felt it would be a useful "memory jogger" for sellers. It would ask questions that agents might like to ask, or, sometimes, later wish they had asked.

Unlike the TDS, the SPQ will not be required by law. Nonetheless, it can be expected that it, too, will become a standard feature of real estate transactions. It will add to the time it takes for a seller and listing agent to go over the paperwork and fill out all the forms. That, no doubt, will be resented. But it will probably result in buyers being better informed, and that in turn should help to reduce accusations and litigation. That should be appreciated.

Published: February 16, 2005

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Bob Hunt is a director of the National Association of Realtors and is author of the recently published book, "Real Estate the Ethical Way." A graduate of Princeton with a master's degree from UCLA in philosophy, Hunt has served as a U.S. Marine, Realtor association president in South Orange County, and director of the California Association of Realtors, and is an award-winning Realtor. Contact Bob at .