Readers who scour the RPI Forms published on this website may come across a conspicuous gap: the Agent Visual Inspection Disclosure (AVID).
This is not accidental — RPI has intentionally elected not to produce a parallel version of the AVID, a non-mandated form originally concocted by the California Association of Realtors® (CAR).
As the AVID is a form used by some real estate practitioners, particularly Realtors, it may be helpful to explain not only why we’ve chosen not to create our own version, but why the AVID itself is redundant at best, and misleading at worst.
The prose does not disclose
As part of a real estate transaction involving any one-to-four unit residential property, a seller is required under California law to disclose the existence of any property defects.
Any property defects that may negatively affect the value and desirability of the property for a prospective buyer are labeled material facts.
As all practicing licensees know, the form on which the seller is mandated by California law to record these material facts is the Transfer Disclosure Statement (TDS), sometimes called a Condition of Property Disclosure Statement — as it relates to the physical property for sale, not its title and possession on closing. [Calif. Civil Code §§1102(a), 1102.3; see RPI Form 304]
The disclosures sellers are compelled to make are not limited to boilerplate items listed on the TDS — all property defects affecting valuation need to be timely disclosed to the buyer. This California public policy effort seeks to align buyers and sellers by eliminating any informational asymmetry regarding what the owner is selling and the buyer is acquiring in a real estate transaction. [CC §1102.8]
The seller’s use of the TDS is established by an act of the California legislature — and thus is mandatory. Even when a seller elects to sell their property without representation and a seller’s agent isn’t on hand to review its content, the seller is still required to prepare the TDS with honesty and in good faith. [CC §1102.7]
Additionally, the buyer can’t waive the seller’s delivery of the TDS, even when the seller or their agent fails to give the buyer a completed TDS before entering into a purchase agreement. Any attempted waiver, such as with the use of an “as-is” clause in the purchase agreement or counteroffer, is void as against public policy. The words “as is” are prohibited in real estate transactions, as they imply a failure to disclose a property defect known to the seller or the seller’s agent. Property is acquired based on conditions “as disclosed” by the seller and the seller’s agent in a TDS, not by an agent “non-disclosure” disclaimer in the AVID, which has no legal bearing. [CC §1102.1(a)]
An agent’s duty
While the TDS is primarily for the seller’s disclosures — as they know the most about property conditions — the seller’s agent also needs to conduct a visual inspection of the property when they list a one-to-four unit residential property for sale. Their findings are recorded in sections III and IV of the TDS to supplement the seller’s disclosures. [See RPI Form 304]
Following their mandatory visual inspection, the seller’s agent reviews the TDS prepared by the seller for completeness. The seller’s agent is statutorily encouraged to rely on specific items covered in a home inspector’s report they obtain on the property before marketing it to prospective buyers. [See RPI Form 130]
However, while a seller’s agent is obligated to hand a prospective buyer their findings from a visual inspection, there is no obligation to hand the buyer a separate disclaimer in the form of an AVID — nor does this mitigate the agent’s liability. All material facts affecting value are to be included in the TDS — such as recommendations about suspected adverse property conditions known to any of the transaction agents.
Since the results of an agent’s visual inspection need to be included on the TDS anyway, it begs the question: Why does the AVID exist in the first place — and who does it actually help?
Breaking down the AVID
The primary differences between the TDS and the AVID are as follows:
- the TDS is exclusively a disclosure — the AVID contains excessive disclaimers regarding an agent’s duties; and
- the TDS is required by law — the AVID is not.
The AVID is a CAR-produced form, which, according to the trade association, “offers much more space to disclose and room by room sections that guide an agent through the inspection process.”
This sounds good on paper, but the illusion fades under scrutiny. The main problem is that the AVID is completely redundant paperwork for the buyer to ferret out just what they need to do or take into consideration before making an offer. The purpose of the seller’s agent’s visual inspection is to observe and record property defects which may alter the value of the property. The seller’s agent is not to diagnose the effects of these defects on the buyer; rather, the purpose is to list what they observe.
Because of the AVID’s length, the temptation exists for agents to extrapolate on the causes of material facts. Of course not all agents will succumb to that temptation, but the objective of the seller’s agent conducting a visual inspection is to produce a list, not an essay. There’s a reason the space for agent disclosures on the TDS is relatively succinct and concise — its purpose is to list factual disclosures.
CAR’s guide to the AVID notes, “Using the AVID gets agents in the habit of always conducting inspections and making disclosures of residential one to four properties without being dependent on the TDS.”
This claim is spurious — the agent’s broker has the obligation of oversight to review and instruct their agents to do what the law mandates, not leave it to a form to manage the agent’s conduct. The visual inspection an agent conducts as part of a transaction is not a habit — it is a legal requirement. The agent is obligated by law to record their findings on the TDS. Of course agents and their brokers will use and depend on a mandatory form!
Ultimately, the purpose of the AVID is simply to duplicate the disclosure commentary already present on the mandated TDS. This replication of an already-mandated form not only wastes time and energy, but muddies the transaction process and creates ambiguity for buyers who are rarely if ever as well-versed as the licensed representation in the nuances of what is required by law versus what is trade union custom.
RPI does not find CAR’s AVID form meritorious. Thus, we do not publish a document which ultimately undercuts the application of the TDS. Simply, the buyer needs to have one document to review with their agent which contains all information about the property and the observations and comments of the agents.