California has a number of state-specific rules applicable to buyers and sellers in the course of a real estate transaction. Many of these laws tend to favor the purchaser, such as enhanced disclosure requirements for sellers. Both parties should be familiar with these laws when purchasing property in California, as many of these rules differ from those of other states.

Written disclosures. California law has stringent disclosure laws for sellers of residential property. Residential sellers must provide detailed information about various conditions that they know or should have known about with respect to the home. This includes the physical structure and state of the home, the condition of internal systems, and the existence of pest or environmental problems. Such disclosures are made on forms that are mandated by California law.

Dual agency. A dual agency relationship occurs when both the seller and buyer are represented by the same real estate agent in a purchase transaction. In many states, dual agents are prohibited since they present an apparent conflict of interest when the broker must negotiate on behalf of each party. In California, brokers can act as dual agents for buyers and sellers so long as both parties consent in writing to the dual agency relationship through a written disclosure form that sets forth the terms of the relationship.

Escrow. California does not mandate the use of escrow, but has specific rules for escrow when used in a transaction. California escrow law states that an escrow agent must be a corporation in the business of handling escrows and licensed by the state. There are exceptions to this rule that allow designated non-authorized escrow agents to receive escrow, including attorneys and brokers who have relationships with the parties in the transaction, and any title company licensed by the California Insurance Commissioner.

Presence of parties. Unlike other states that require both parties to be physically present at the closing of the transaction, the buyer and seller need not attend the closing in California. The various procedures that constitute settlement of the transaction may take place at the title company office without the physical presence of the parties.

Contact Shane Coons at 949-333-0900 or visit his website at www.ShaneCoonsLaw.com to find out more about his practice.