The Transfer Disclosure Statement (TDS) is a mandatory California seller disclosure form, required by Civil Code Section 1102, that reveals the home's known defects and material conditions. Sellers must complete it honestly and to the best of their knowledge. After you receive a completed TDS, California law gives you a right to cancel the purchase: 3 days if it was delivered in person, or 5 days if it was delivered by mail.
What the TDS is
The Real Estate Transfer Disclosure Statement is one of the most important documents in any California home sale. It is a standardized form on which the seller discloses what they know about the property's condition. California is a disclosure-heavy state — the law's logic is that the seller knows the house better than anyone, so the seller must put that knowledge in writing.
The TDS is required on most sales of one-to-four residential units. It is not a warranty and it is not an inspection report. It is a statement of the seller's actual knowledge. That distinction matters: the seller is not promising the house is perfect — they are promising they have honestly told you what they know.
What the TDS covers
The form walks through the property system by system. The seller checks off and explains anything they are aware of. Major areas include:
Appliances and systems — the condition of built-in appliances, heating, air conditioning, plumbing, electrical, and the water heater. Structural items — the roof, foundation, walls, windows, and any known leaks or settling. Significant defects — known problems in the interior, exterior, garage, or other structures.
It also asks about legal and use issues: additions or remodels done without permits, encroachments or easements, zoning violations, neighborhood noise problems, lawsuits affecting the property, and whether the property is in a flood or fire hazard zone. The seller's section is followed by sections completed by the listing and buyer's agents based on their visual inspection.
Who must provide it — and the exemptions
Most sellers of residential property with one to four units must provide a TDS. But California law exempts certain transfers because the seller genuinely lacks personal knowledge of the property's condition.
Common exemptions as of 2026 include transfers by a trustee in a probate sale, transfers from a trust where the trustee never occupied the home, foreclosure and lender (REO) sales, and transfers between co-owners or to a spouse. If you are buying an exempt property, do not assume "no TDS" means "no problems" — it usually just means the seller has no firsthand knowledge. That makes your own inspections even more important.
Your review and right to cancel
Here is the part every California buyer should know cold: once you receive a fully completed TDS, you have a statutory right to cancel the purchase. The window is 3 days if the TDS was delivered to you in person, and 5 days if it was delivered by mail. This is separate from, and in addition to, the contingency periods in your purchase agreement.
In a typical transaction, the seller delivers disclosures early, so this right runs alongside your inspection contingency rather than extending things at the end. But if a TDS arrives late, or an amended TDS shows up disclosing something new, that delivery can restart a cancellation window. Always confirm the delivery date in writing.
Red flags to look for on a TDS
When I review a TDS with a buyer, a few answers always trigger follow-up questions. Disclosed roof leaks or roof repairs — how old is the roof, and was the repair permitted? Any mention of work done without permits — additions, converted garages, and bootleg units can affect insurability, financing, and value.
Other flags: known drainage or grading problems, any history of flooding or water intrusion, soil movement or foundation notes, and disclosed neighborhood nuisances like noise. None of these automatically kill a deal — but each one should be investigated, not glossed over. A disclosed problem you understand is far better than an undisclosed one you discover later.
TDS vs. the other California disclosures
Buyers often blur the TDS together with the stack of other paperwork. They are distinct. The TDS is the statutory condition disclosure. The SPQ (Seller Property Questionnaire) is a supplemental CAR form that digs deeper into history, repairs, and neighborhood issues. The NHD (Natural Hazard Disclosure) is a third-party report on flood, fire, and earthquake hazard zones.
Together with lead-based paint disclosures (for pre-1978 homes), the local point-of-sale and Mello-Roos notices, and the preliminary title report, these documents form your full disclosure package. Read all of them — the TDS is the headline act, but the supporting documents often contain the detail.
Frequently Asked Questions
What is a TDS in California real estate?
The Transfer Disclosure Statement is a mandatory form, required by California Civil Code 1102, on which the seller discloses the known defects and material conditions of a residential property of one to four units.
Can I cancel after receiving the TDS?
Yes. California law gives buyers a right to cancel the purchase within 3 days of in-person delivery of a completed TDS, or 5 days if it was delivered by mail. This is in addition to your purchase agreement contingencies.
Is a TDS the same as a home inspection?
No. The TDS reflects only what the seller and agents actually know or can see. It is not a professional inspection. You should still hire your own licensed inspectors regardless of what the TDS says.
What homes are exempt from the TDS?
Common exemptions include probate sales, transfers from trusts where the trustee never lived in the home, foreclosure and lender-owned (REO) sales, and certain transfers between co-owners or spouses.
What happens if a seller lies on the TDS?
A seller who knowingly conceals or misrepresents a material defect can face liability. If you believe a seller failed to disclose something they knew, consult a California real estate attorney — this is fact-specific and not something to handle alone.
