September 18, 2008
Legislative Committee
This material is for discussion purposes only and has not been approved
by the Legislative or Executive Committees or the Board of
Directors
Issue:
Should C.A.R. sponsor legislation to
consolidate disclosures of public safety “certifications” such as water
heater strapping within the Transfer Disclosure Statement?
Action:
Optional
Options:
1. Do Nothing. Continue to use C.A.R.
standard forms to comply with existing law’s requirements.
2. Draft Legislation for Possible Introduction in 2009. The goal of
the legislation would be to reduce the number of forms required in an
individual transaction by consolidating existing requirements into the TDS;
Issues Briefing for final approval in January 2009.
3. Seek to amend legislation of others during the 2009 legislative
session to make the water heater strapping/smoke detector disclosure
changes described below.
4. Other.
Status/Summary:
Over the years, several attempts to
require safety devices (smoke detectors, auto-reversing garage door
openers) to be installed in homes at time of sale have been changed into
universal rules, whose compliance must be disclosed or “certified” at sale.
Compliance mechanisms differ for the various rules, but the seller
certification requirements have required a separate form (C.A.R. form WHSD)
in addition to the disclosures contained in the Transfer Disclosure
Statement (TDS). An initial agreement to change the TDS to be the vehicle
for all such disclosures was removed from SB 1386 (Lowenthal) during its
consideration in Senate Appropriations Committee earlier this year.
Discussion:
If a proposal cannot be killed outright, it has not been uncommon for
C.A.R. to force proposed point of sale mandates to instead become point of
sale disclosures. Sometimes the simple disclosure of the item that was
proposed to be mandated (e.g. auto-reversing garage door openers) is deemed
to be enough; other times the mandate is applied to all housing stock and
compliance with the new mandate is required be demonstrated at sale.
Unfortunately for the seller and his or her agent, the various statutes
differ slightly in their approach, and there is not a single standardized
mechanism by which to comply. This lack of standardization invites
confusion and potential liability, and multiplies both decision making and
paper flow.
The TDS was placed in the statutes (Civil Code 1102 et seq.) in response to
the Easton vs. Strassburger case, which imposed new inspection and
disclosure obligations on agents. While relatively minor changes like the
ones mentioned above have been made over the years, C.A.R. has not made a
significant proactive change in the statutory form since “mold” was added
to the toxics section of the narrative portion.
The most recent change in this area was SB 1386, Lowenthal, which will
require all privately owned residential accommodations to have a carbon
monoxide detector beginning in 2010. During the course of negotiations on
the bill, C.A.R. opposed the point of sale requirement for homes and forced
the bill into a comprehensive program with a delayed operative date,
limited liability for agents, and a new check box disclosure in the TDS.
However, C.A.R.’s language to conform other disclosures (e.g. water heater
strapping) to the same model was removed from the bill as it moved through
the legislative process. The other participants in the negotiations
characterized the change as outside the issue of the bill, and a “bill for
another year.”
C.A.R. has historically been reluctant to propose a redrafting of the TDS,
because keeping control of it may be problematic in a legislature where
advocates of liability are so well represented. The concern in earlier
years has been that the “price” of passage of a C.A.R.-sponsored re-write
of disclosures would be too expensive in terms of concessions on other
liability. Of course, when C.A.R. is the sponsor it is in a better position
to control the bill and can always ask an author to drop a bill if it is
burdened with unacceptable amendments. Indeed, it was that very lack of
control that denied C.A.R. the ability to make the desired changes in SB
1386.
Should C.A.R. prepare disclosure consolidation legislation to
sponsor in the 2009-2010 legislative session?
