Recently the legal department of the California Association of Realtors (CAR) issued an updated question-and-answer memorandum entitled, "Disclosure Issues Related to Residential Care Facilities and Day Care Homes."

This document will be significantly useful to Realtors® and their clients, both of whom are likely to have a certain amount of ambivalence in situations where these issues come up.

The term 'residential care facility' covers a variety of uses, ranging from foster family homes to adult care to facilities providing rehabilitative services to those recovering from mental illness. Regrettably, there is frequently a great deal of "not in my back yard" sentiment expressed when the issue of residential care facilities arises.

The CAR memorandum covers a wide variety of care facilities, and it makes clear that there are often subtle differences in the law with respect to the individual types. Nonetheless, the similarities -- especially with respect to real estate disclosure issues -- greatly outweigh the differences.

Probably the most significant common element among the various types of facilities is that most of the relevant laws are addressed to those which serve six or fewer persons. To determine the "six or fewer" the following are not included: a licensee-care giver, the members of the care giver's family, or staff personnel.

Having noted that there are occasional variations in the law with respect to different types of facilities, for purposes of our discussion we will focus on the issues as they relate to a type of facility that often stirs controversy: an Alcoholism and Drug Abuse Recovery or Treatment Facility. What is said about this type of facility generally applies to the others?

First, we note that, under California law, they "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 for the purposes of this article. [Cal. 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? Suppose there is an alcoholism or drug abuse recovery facility next door. Is there an obligation upon either the real estate agent or the seller to disclose that fact to a potential buyer? No.

The analysis is two-fold.

1. There 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, anything which is done or maintained under the express authority of a statute -- as a recovery facility would be -- cannot be considered a nuisance. Of course, if there were constant loud noises or traffic problems, those could be considered nuisances.

2. There is an affirmative duty to disclose material facts that might affect the value or desirability of a property. However, the California attorney general's office has already issued an opinion that the location of a licensed care facility cannot be a material fact. 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.

Well, ok, there may not be a duty to disclose the existence of such a facility; but what about volunteering the information? The CAR memorandum counsels caution in this regard. It points out that both alcoholism and drug addictions are considered to be handicaps under the law. "Therefore, volunteering information concerning the presence of an alcoholism or drug abuse recovery or treatment facility may violate state and federal law prohibiting discrimination based upon a person being handicapped."

Published: November 14, 2005

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Bob Hunt is a former 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 .