For subrogation investigations on losses to residential property, do not forget to check for the permits on recent improvements, as well as purchase agreements and seller disclosures on recently purchased properties. California Assembly Bill No. 968 (AB-968), which will apply to real property sale contracts starting July 1, 2024, creates new disclosure obligations of repairs and renovations for sellers who sell residential properties within 18 months of purchase. These disclosures will put in the hands of the insured property owner the identification of potential liable parties for losses related to property improvements.
AB-968 supplements existing residential transfer disclosure requirements adding additional requirements for sellers who purchase a property and sell it within 18 months of its purchase. Specifically, AB-968 requires a seller of a single-family residential property who sells the property within 18 months of purchasing it to disclose to the buyer specified information, including but not limited to, a list of all repairs and improvements including any room additions and structural modifications made since acquiring the property, names and contact information of all contractors involved, and copies of permits obtained, if applicable.
The bill specifies that these provisions apply to the sale of a single-family residential property where the seller and buyer enter into a contract or agreement for the property on or after July 1, 2024.
AB-968 will protect homeowners from undisclosed property conditions and assist in subrogation recoveries as residential homeowners who purchased their home within 18 months of its sale will be privy to information related to any third parties that worked on the property prior to their purchase.
