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Real Estate · License Law Violations and Discipline

What is a 'Transfer Disclosure Statement' (TDS) in states that require it?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

A seller-completed form disclosing the seller's knowledge of the property's condition, known defects, and material facts — required by law in California and similar states; the buyer must receive it before the purchase becomes final

  1. A A seller-completed form disclosing the seller's knowledge of the property's condition, known defects, and material facts — required by law in California and similar states; the buyer must receive it before the purchase becomes final
  2. B A document the bank provides
  3. C A broker's fee disclosure
  4. D A title company document

Why this is the answer

TRANSFER DISCLOSURE STATEMENT (TDS): Required in California (and similar forms in many states) for residential property sales. The seller completes it (not the broker) disclosing: known defects in systems and components (roof, foundation, plumbing, HVAC); prior repairs; known issues with title; neighbourhood nuisances; deaths on the property (state-specific rules); any other material facts. The TDS is a STATUTORY document — required by Civil Code 1102 in California. Consequences of failing to provide: the buyer can rescind the contract; the seller and broker can face liability. The listing agent independently investigates and completes their own portion of the TDS. Combined, both portions give the buyer a comprehensive picture of known conditions. The TDS must be provided early enough that the buyer can rescind if they don't like what they learn.
Source: Real Estate State Exam, Transfer Disclosure Statement

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About this topic: License Law Violations and Discipline

License law violations and discipline cover the grounds for discipline, the complaint and hearing process, penalties (fines, suspension, revocation), and the recovery fund. This is one of 20 Broker (State Law) questions on license law violations and discipline, each with a full explanation on a single study page.

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