California real estate disclosure laws California Real Estate Disclosures | Page 41

The duty to provide the disclosures also applies to an attorney or a real estate
licensee who is a principal in the transaction. The disclosure statement
required by this law must be delivered as soon as possible before the
execution of any note or security document. The arranger of credit, the
buyer, and the seller each must sign and receive a copy of the disclosure
statement. If there is more than one arranger of credit, the arranger obtaining
the offer from the buyer is responsible for making the disclosure. However,
another person may be designated in writing by the parties to the transaction
to make the disclosures.
Notwithstanding the foregoing, the arranger of credit representing the seller
would have a duty, as agent of the seller, to ensure that the seller receives an
appropriate disclosure of the material credit terms of the credit transaction as
described herein.
The disclosure statement is to include comprehensive information about the
financing, cautions applicable to certain types of financing, and suggestions
of procedures that are intended to protect the parties during the term of the
financing. The disclosures include:
•

Identification of the note, credit, and security document and the property
which is or will become the security;

•

A copy of the note, credit, and security document, or a description of the
terms of these documents;

•

The terms and conditions of each encumbrance recorded against the
property which will remain as a lien or is an anticipated lien that will be
senior to the financing being arranged;

•

A warning about the hazards and potential difficulty of refinancing and,
if the existing financing or the financing being arranged involves a
balloon payment, the amount and due date of the balloon payment and a
warning that new financing may not