Completing Agent’s Section of the TDS

May 13th, 2024 at 4:21 pm

Fact Pattern: You are the listing agent for a pending sales transaction. The seller has completed Sections I and II of the Real Estate Transfer Disclosure Statement (TDS). You, however, have not yet finished conducting your own visual inspection of the property nor have you completed your Agent Visual Inspection Disclosure (AVID). You nevertheless want to deliver the TDS to the buyer now, before you do your AVID. The first checkbox in Section III of the TDS concerning the listing agent’s Inspection Disclosure says, “See attached Agent Visual Inspection Disclosure (AVID Form).” The second checkbox in Section III says, “Agent notes no items for disclosure.” The third checkbox says, “Agent notes the following items:” followed by some blank lines.

Multiple Choice Question: How should you complete the TDS under these circumstances? Pick the best answer:

A. You cannot submit the TDS to the buyer until after you do your visual inspection, complete your AVID, check the first box in Section III of the TDS, sign and date Section III, and attach your AVID.
B. Check the second box in Section III, and sign and date.
C. Check the third box in Section III, insert “AVID to follow” in the blank lines provided, and sign and date.
D. Check no box in Section III, and sign and date. 

Answer: Answer A is wrong. It’s a great idea for you to complete your visual inspection and AVID before submitting the TDS to the buyer. However, you are not legally obligated to do so. That said, the TDS will not be considered fully completed until the seller completes Sections I and II, and you as the listing agent completes Section III (see paragraph 11A(2) of the RPA).

Answer B is not a good answer. You may think that it’d be okay to say on the TDS for now that you “note no items for disclosure,” because you are planning on submitting your AVID later on. But in truth, as the listing agent, you probably already know many significant things about the property, so saying that you “note no items for disclosure” may be a false statement.

Answer C is the best answer. But as discussed above, the TDS will not be considered fully completed until you submit your AVID to the buyer.

Answer D is not a good answer. The boilerplate language in Section III states that you are disclosing certain things, based on your visual inspection of the property. If you just sign and date Section III, it may appear as if you have nothing to disclose based on a visual inspection that you have already conducted, when, in truth, you are planning to do your visual inspection and AVID later.

-Thank you to Kelly Bradley (Pasadena Office) for suggesting this week’s legal tip!

Copyright© 2024 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of May 13, 2024. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals. Written by Stella Ling, Esq.

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