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Updates to the PRDS San Mateo County/Santa Clara County Advisory

By David Hamerslough

The PRDS Forms Committee is in the process of updating the San Mateo County/Santa Clara County Advisory. The following is a brief overview of the topics that have now been added to the advisory.

The TDS (Question 16, Section 2(c)) asks the seller if they are aware of any lawsuits by or against the seller threatening to or affecting the real property. The seller is then asked if there are “claims for damages by the Seller pursuant to Section 910 or 914 threatening to or affecting the real property, claims for breach of warranty pursuant to Section 900, or claims for breach of an enhanced protection agreement pursuant to Section 903, including any lawsuits or claims for damages pursuant to Section 910 or Section 914 alleging a defect or deficiency in the real property or ‘common areas’.”

These Code sections are part of a law known as the Right to Repair Act (Civil Code §§ 895-945). This law became effective on January 1, 2003 and generally applies to residential real property built by a “builder” (as defined in Section 911) and sold for the first time after January 1, 2003. The law was passed as a result of Senate Bill 800 and was commonly referred to as SB 800 or Title VII.

The TDS is contained in Civil Code §§ 1102 et seq. When the legislature chose to reference Sections 900, 903, 910, and 914 in the TDS, they assumed that everyone would understand that references to these sections refer to the Civil Code and the Right to Repair Act. They also assumed that a seller would know that Section 900 provides for a limited one-year warranty from the builder, Sections 901 et seq. apply to “enhanced protection agreements,” which are sometimes provided by the builder and may extend the warranty, and that Sections 910 and 914 refer to pre-litigation procedures and remedies in the event of a claim against the builder.

The advisory now contains a section discussing these issues and states that sellers who have questions about how to answer this question in the TDS should consult with a qualified California real estate attorney for advice. The advisory also provides that if lawsuits or claims are disclosed by the seller, buyer should investigate such disclosures with a qualified California real estate attorney and that brokers are not qualified to give advice on these matters.

The advisory also now contains a disclosure about residential wood-burning fireplaces, in response to the Bay Area Air Quality Management District’s establishing the Woodsmoke Rule, Regulation 6, Rule 3, to reduce wintertime smoke pollution and protect public health. The Woodsmoke Rule requires anyone selling, renting, or leasing a property in the Bay Area to disclose the health impacts from air pollution caused by burning wood. General information regarding fine particulate matter, also known as PM25, is provided along with a recommendation that a buyer should consult with a licensed professional to inspect, properly maintain, and operate a wood-burning fireplace insert according to manufacturer’s specifications to help reduce woodsmoke pollution. Information is also provided regarding winter “Spare the Air” alerts, which are issued from time to time by the BAAQMD when it is illegal to burn wood, manufactured fire logs, pellets, or any solid fuels in fireplaces, wood stoves, or outdoor fire pits. Contact information for the BAAQMD and any alerts that are issued is also provided.

A section has been added regarding electronic signatures. Buyers and sellers are advised that buyers or sellers may be able to sign transaction documents electronically, making it possible to skip from one signature line to the next, ignoring the terms and conditions to which a signature or initial applies. They are further advised that if they choose to sign documents electronically, they should be certain to take their time to read each document thoroughly and only sign or initial those documents that they intend to sign with full knowledge and consent.

The advisory also now includes a section concerning a new ordinance in San Mateo County relating to on-site wastewater. Effective February 4, 2016, all new residential or commercial facilities that are unable to connect to a sewer line must install an on-site wastewater treatment system (“OWTS”) depending upon the size of the property and where it is located. Currently, this ordinance applies to the towns of Portola Valley, Woodside, and Half Moon Bay and also applies to unincorporated areas of San Mateo County. For a new septic system, a site exam and soil percolation test must be completed prior to submission of a septic installation permit application. A remodel of property serviced by an existing OWTS may require an upgrade of the OWTS and additional plans or testing may be necessary.

The ordinance also requires that existing septic tanks must be serviced by a certified septic pumping company, that company must provide the County with a copy of the written report regarding the condition of the septic tank within 30 days of pumping, and if there are deficiencies noted in the OWTS, the County Environmental Health Department will notify the owner in writing of the needed corrections, and the homeowner will then have 60 days to make the repairs. While securing a septic inspection report is not a condition of sale unless the buyer and seller agree in writing to conduct that inspection, any resulting report must be provided to the County, and the homeowner will then have 60 days to make the repairs, unless there is a contractual arrangement for the buyer to do so.

This ordinance raises a number of questions, including who or what is a certified septic inspector, whether the buyer will waive a septic inspection (and, if not, the inspection report identifies repairs that must be completed, who will pay for those repairs, especially if the buyer has a contingency and does not elect to purchase the property), etc. The Forms Committee is in the process of drafting an addendum to address issues raised by this ordinance, and this addendum should also be out shortly.

The last update concerns the Aldercroft Heights County Water District (“AHCWD”). AHCWD is a California special district that provides water services in the Aldercroft Heights neighborhood in the Santa Cruz Mountains. Sellers are responsible for contacting the AHCWD’s business office so that a final meter reading can be taken; a $600 transfer fee is collected in escrow. To initiate water service, the buyer must also contact the AHCWD’s business office, and all past-due water service charges must be made current as a condition of receiving water service.

The PRDS Forms Committee welcomes any input that anyone may have on the subject matters that are included, or not included, as well as any of the language that already exists to describe those issues or subject matters.