In California, the duty to inform is a legal obligation to share material facts with the other party to a transaction or relationship, even when nobody has asked. It shows up most often when you sell a home, rent out a unit, act as a real estate agent, or stand in a fiduciary role such as attorney, trustee, or financial advisor. Stay silent about something the other side needed to know and you can be on the hook for actual damages, and in serious cases for rescission of the deal or punitive damages on top.1California Legislative Information. California Code CIV 1102.13
What Counts as a Material Fact
A fact is material if it could reasonably influence the other party’s decision to go forward or the price they would pay. Physical problems obviously qualify: a cracked foundation, a leaking roof, faulty wiring. So do non-physical issues like neighborhood noise, boundary disputes, or pending litigation tied to the property. The duty is one of honesty about what you actually know. You are not expected to inspect like a professional, but you cannot pretend not to know what you know.
Labeling a sale “as-is” does not get you out of it. California law voids any waiver of the statutory disclosure requirements as against public policy.2California Legislative Information. California Code CIV 1102 – Disclosures Upon Transfer of Residential Property
Seller Disclosures on Residential Property
If you sell a single-family home, you must complete a Transfer Disclosure Statement (TDS) under Civil Code Section 1102.6. The form asks you to report on the roof, plumbing, electrical, heating, and appliances, and to flag known defects, unpermitted alterations, and anything else that could affect the property’s value or desirability.2California Legislative Information. California Code CIV 1102 – Disclosures Upon Transfer of Residential Property
Some transfers are exempt from the TDS form itself, including trustee sales, court-ordered sales, and transfers by foreclosure. The exemption is narrower than most sellers think. Even without the form, the common-law duty to disclose known material defects still applies. Skipping the paperwork is not permission to hide problems.
Death on the Property
If someone died on the property within the last three years, you must disclose that fact when a buyer asks. After three years, neither you nor your agent has to volunteer it, and a death older than three years is not treated as a material fact. There is no obligation to disclose whether an occupant had HIV or AIDS regardless of when the death occurred, and a buyer cannot use that information as grounds for rescission.3California Legislative Information. California Code CIV 1710.2
Natural Hazard Zones
Separate from the TDS, you must give the buyer a Natural Hazard Disclosure Statement showing whether the property sits in a special flood hazard area, a very high fire hazard severity zone, an earthquake fault zone, a seismic hazard zone, a state fire responsibility area, or an area at risk of flooding from dam failure.4California Legislative Information. California Code CIV 1103 The form draws from official government maps, so it applies whether or not you personally knew about the hazard.
Lead-Based Paint in Pre-1978 Housing
Federal law adds another layer. If the home was built before 1978, 42 U.S.C. ยง 4852d requires you to disclose any known lead-based paint or lead hazards, hand over an EPA-approved pamphlet, share any inspection reports you have, and give the buyer a 10-day window to arrange their own lead inspection before the contract becomes binding. The buyer can waive that window in writing, but you cannot skip the disclosure itself.5Office of the Law Revision Counsel. 42 USC 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property The contract must include a signed Lead Warning Statement, and the seller and agents must keep the disclosure records for at least three years.6eCFR. Subpart A – Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards Upon Sale or Lease of Residential Property
What Landlords Have to Tell Tenants
Landlords owe their own set of disclosures, most of them before the tenant signs or moves in.
- Mold. If you know or have reasonable cause to believe mold is present in the unit or building and it either exceeds permissible exposure limits or threatens health, you must give written notice to prospective tenants before lease signing and to current tenants as soon as reasonably practical. You are not required to test for it.7California Legislative Information. California Health and Safety Code 26147
- Megan’s Law database. Every residential lease and every purchase contract for one-to-four-unit properties must include a notice, in at least 8-point type, pointing the tenant or buyer to California’s sex offender database.8California Legislative Information. California Code CIV 2079.10a
- Pest control. If you have a periodic structural pest control contract, each new tenant gets a copy of the pest control company’s notice identifying the pest, the pesticides used, and the health warnings.9California Legislative Information. California Code CIV 1940.8
- Planned demolition. If you have applied for a demolition permit, prospective tenants must get written notice before signing or paying anything, including application screening fees.10California Legislative Information. California Code CIV 1940.6
- Lead-based paint. The federal rules that apply to sales of pre-1978 housing apply to leases too.5Office of the Law Revision Counsel. 42 USC 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property
That list is not the whole set. California also requires landlord disclosures about bed bugs, flooding and drainage history, proximity to former military ordnance sites, and shared utility meters, among others. The common thread is that tenants are entitled to know anything that affects their health, safety, or financial obligations before they commit.
Real Estate Agent Duties
A listing agent in California carries disclosure duties that are independent of the seller’s. Under Civil Code Section 2079, the agent must conduct a reasonably competent visual inspection of accessible areas and tell the buyer what the inspection reveals. If an agent walks through a house and sees water stains or cracks, those get flagged for the buyer regardless of what the seller wrote on the TDS.
Dual Agency
When one agent represents both buyer and seller in the same transaction, California treats it as a dual agency with heightened disclosure. The agent must tell both parties about the dual relationship as soon as practicable and confirm it in the purchase contract or in a separate signed writing before closing.11California Legislative Information. California Code CIV 2079.17 The agent still owes both sides a fiduciary duty of care, integrity, and honesty, but cannot share certain confidential information without permission: the seller’s willingness to accept less than list price, the buyer’s willingness to pay more, or either side’s financial position or motivations.
Fiduciaries and Constructive Fraud
Outside real estate, California places a heightened duty to inform on anyone in a fiduciary relationship. That includes attorneys and clients, financial advisors and investors, trustees and beneficiaries, and business partners. The fiduciary must disclose every material fact that could affect the other party’s decisions, asked or not. Withholding information while benefiting from the silence is where this duty bites.
California treats that kind of silence as constructive fraud. Under Civil Code Section 1573, constructive fraud is a breach of duty that, without actual fraudulent intent, gains an advantage to the person in fault by misleading another to their prejudice.12California Legislative Information. California Code Civil Code CIV 1573 You do not have to prove the fiduciary intended to deceive. That lower bar is why constructive fraud is such a workable claim when a client later discovers an advisor or attorney quietly profited from an undisclosed conflict.
Warning Visitors About Dangerous Conditions
Property owners and occupiers have a general duty to warn visitors about concealed dangerous conditions. Civil Code Section 1714 holds everyone responsible for injuries caused by their failure to exercise ordinary care in managing their property.13California Legislative Information. California Code CIV 1714 If you know about a hidden hazard, such as a rotting deck, an unmarked drop-off, or faulty wiring, you either fix it or post a clear warning. A visible pothole in a parking lot carries less obligation than a covered one, because visitors can see and avoid the obvious. “Obvious” is not a blanket defense, though; even a visible condition can create liability if you should have anticipated people encountering it anyway.
Landlords carry an added piece of this. When a pattern of criminal activity develops on or near the building, the landlord has a duty to warn tenants about the known risks and take reasonable steps to address them. Ignoring repeated break-ins or assaults in common areas and saying nothing to tenants can create negligence liability for injuries that follow. The duty is not to guarantee safety but to keep tenants informed and take reasonable precautions against foreseeable harm.
What It Costs You to Stay Silent
In residential real estate, a seller who willfully or negligently fails to make a required disclosure is liable for the buyer’s actual damages. The sale is not automatically voided, but the buyer keeps the right to sue for the financial harm the silence caused.1California Legislative Information. California Code CIV 1102.13 Actual damages typically mean the gap between what the buyer paid and what the property was actually worth given the undisclosed defect, plus repair costs and related expenses.
When the nondisclosure rises to fraud or intentional concealment, the exposure grows. A buyer can seek rescission, returning the property and recovering the purchase price. Punitive damages are available if the buyer shows by clear and convincing evidence that the seller acted with malice, oppression, or fraud. Malice here means the seller either intended harm or acted with a willful, knowing disregard for the buyer’s rights and safety.14Justia. CACI No. 3947 – Punitive Damages – Individual and Entity Defendants – Trial Not Bifurcated
Timing shapes any lawsuit based on nondisclosure. For visible or easily discoverable construction and property defects, the deadline is generally four years from substantial completion. For hidden defects the outer limit stretches to ten years, with a shorter deadline kicking in once you actually discover the problem. Deliberate concealment can toll those deadlines, giving the buyer more time to sue.
For fiduciaries, the constructive fraud framework in Civil Code Section 1573 is its own basis for liability. A fiduciary who benefits from withholding information can face compensatory and punitive damages without the injured party proving intent to deceive.12California Legislative Information. California Code Civil Code CIV 1573 Property owners who fail to warn about dangerous conditions face standard negligence liability, which can include medical costs, lost income, and compensation for pain and suffering.