California Real Estate SalespersonPractice of Real Estate and DisclosuresMedium
A licensee is asked by a seller to help facilitate a sale through a trustee's deed following a foreclosure. Which statement about the Transfer Disclosure Statement (TDS) is correct for this transaction?
- AThe TDS is exempt because the transfer is by a trustee's deed pursuant to a power of sale after default
- BThe TDS is required because all residential resales require it
- CThe TDS is exempt only if the buyer waives it in writing
- DThe TDS must still be given but can be delivered after close of escrow
Show answer & explanationAnswer & explanation
Correct answer: A. The TDS is exempt because the transfer is by a trustee's deed pursuant to a power of sale after default
California Civil Code exempts transfers by foreclosure (trustee's sale) from the TDS requirement because the transferor typically has no personal knowledge of the property's condition.
Why the other options are wrong
- B. TDS has several statutory exemptions, foreclosure being one of them.
- C. Exemption is automatic by statute, not dependent on buyer waiver.
- D. There is no requirement to deliver it later since the transfer is exempt.
TDS Statutory Exemptions
Certain transfers are exempt from the Transfer Disclosure Statement requirement, including foreclosure sales, transfers between co-owners, and court-ordered transfers.
- Foreclosure/trustee's sales are exempt from TDS
- New construction with public report is exempt
- Exemptions exist because seller lacks personal knowledge or transfer is involuntary
Memory trick: Foreclosed = No Feelings, No Fill-out (no TDS needed)