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Disclosures & inspections

10 min read Facts verified Oct 6, 2026
The Painted Ladies under a bank of fog, with downtown towers fading into the mistAURELIEN CHATEAUDON / Unsplash

This chapter is for buyers who are about to read their first San Francisco disclosure packet and want to know what's in it, what to worry about, and what to check on their own. Here, most of the homework happens before you make an offer, not during escrow. Sellers publish a disclosure packet, often with every inspection already done, and the winning offer usually waives the inspection contingency (your right to back out over what an inspection finds). Reading that packet quickly and carefully is the real skill, and you can learn it.

The short version

  • SF listings are pre-inspected. Expect a pest report (Section 1/Section 2), a general inspection, and often roof, sewer-scope and sometimes foundation reports, plus the 3R and the statutory seller disclosures.
  • The 3R report shows the legal use and the permit history, but omits electrical and plumbing permits. Pull the full DBI permit record yourself. It's free and online.
  • Unpermitted work (downstairs bedrooms, baths, in-law units) is the single most common SF problem. It affects appraisal, insurance, resale, and possibly forced legalization.
  • Check hazard maps yourself: liquefaction (Marina, SoMa, Mission Bay, Dogpatch), the SFPUC storm-flood map, and the soft-story list for 5+ unit buildings.
  • Have your inspector or contractor walk the house before the offer date. If you're waiving contingencies, that walk-through is your inspection.

What's in a typical SF disclosure packet

A few names you'll see: DBI is the city's Department of Building Inspection, SFAR is the San Francisco Association of Realtors, and the SFPUC is the city's water and sewer utility.

DocumentWho prepares itWhat it tells youRead for
TDS (Transfer Disclosure Statement)SellerKnown defects, required by state lawAnything checked "yes" and the explanations
SPQ (Seller Property Questionnaire)SellerDeeper Q&A: leaks, repairs, neighbors, insurance claimsWater intrusion, past claims, "repairs without permits"
AVID (Agent Visual Inspection Disclosure)Listing agentWhat the agent saw on a walk-throughCracks, stains and slopes they noted
NHD (Natural Hazard Disclosure)Third-party vendorSeismic/liquefaction zones, flood zones, etc.Liquefaction and landslide zones
SFAR local disclosuresSeller/agentSF-specific items (rent control, unwarranted units, etc.)Rent Ordinance, UDU acknowledgments
Lead-based paint disclosureSellerKnown lead hazards (pre-1978)Nearly every SF house qualifies
Pest report (Section 1/2)Licensed pest inspectorWood-destroying organisms and conditionsSection 1 costs, who pays
General home inspectionHome inspectorSystems, structure, safetySummary page, then "recommend further evaluation" items
Roof reportRooferRemaining life, leaksRemaining years and repair cost
Sewer lateral scopePlumber (video)Cracks, roots, offsets, belliesUpper-lateral defects (yours to fix)
Foundation / structural letterEngineerSettlement, cracks, retrofit statusWords like "ongoing", "recommend monitoring"
3R ReportCity (DBI), ordered by sellerLegal use and permit historyUnit count vs. reality
Water conservation certificateDBI-certified inspectorFixture compliance at saleUsually a non-issue (seller's job)
HOA documents (condos)HOA, via sellerFinances, rules, litigationSee below
TIC agreement (TICs)Co-ownersGovernance, default remediesHave a TIC attorney read it
Rent Board history / estoppels (tenant-occupied)Seller / tenantsRent, lease, eviction historyProtected tenants, past OMI/Ellis

In the table, UDU means unauthorized dwelling unit (an in-law apartment built without permits). HOA is the homeowners association, TIC is tenancy-in-common (shared ownership of a building), an estoppel is a tenant's signed statement of their rent and lease terms, and OMI/Ellis refers to owner move-in and Ellis Act evictions.

What each report tells you

Pest: Section 1 vs. Section 2

  • Section 1 covers active infestation or damage: termites, dry rot, fungus. Lenders care about it, and by custom the seller often pays for it (credited or completed).
  • Section 2 covers conditions likely to lead to damage: earth-to-wood contact, excess moisture, plumbing leaks. Responsibility is negotiated, and often falls to the buyer.
  • Neither split is required by law. It's a local habit. In a competitive SF deal the house is usually sold as-is, and the pest number simply becomes part of your price.

Look at the dollar totals for each section and the "further inspection recommended" items (spots the inspector couldn't reach, like under floors or behind walls). Those are where the expensive surprises usually turn up.

General home inspection

Skip the 80-page photo dump and go to the summary. Sort it into three piles:

  1. Safety and structure: foundation cracks or settlement, knob-and-tube wiring (old, ungrounded wiring common in pre-war houses), ungrounded or overloaded panels (watch for brands that inspectors flag as problematic), gas-line issues, missing seismic straps on water heaters, and smoke/CO detectors.
  2. Big-ticket systems: roof, sewer lateral, galvanized supply lines, the furnace or boiler, windows.
  3. Cosmetic and maintenance: note them, budget for them, and move on.

Roof, sewer and foundation reports

  • Roof: get the remaining-life estimate in years and the replacement cost. Flat roofs on SF Victorians and Edwardians often drain poorly.
  • Sewer lateral (the pipe from your house to the city sewer main): SF has no point-of-sale sewer lateral requirement (unlike some East Bay cities). But you own the whole lateral, and replacing the upper part can run into five figures. The SFPUC generally repairs the lower lateral (curb to main) for structural defects reported via 311. Practitioner sources reported this as of mid-2026. Confirm with the SFPUC.
  • Foundation: brick or unreinforced foundations under Victorians, sand-soil settlement in the Sunset, and hillside retaining walls come up again and again. If the general inspector writes "recommend structural engineer", get one before the offer date, along with a quote from a foundation contractor →.

The 3R report and permit history

The Report of Residential Building Record (3R) is SF's official summary of a property's authorized use (how many legal units) and its building permit history. Sellers must provide it. Anyone can order one from DBI for $379 per building (plus a 2.5% card fee), and the city says it issues reports in 7–10 business days.

You can check the permit record yourself in about 10 minutes:

  1. Open DBI's Permit/Complaint Tracking System and search by address or block/lot.
  2. List every permit: building, electrical and plumbing. Note the status: issued, complete, expired, cancelled.
  3. Flag anything issued or expired but never completed (finaled). That's open work the next owner inherits.
  4. Check complaints and notices of violation (NOVs). An open NOV can follow the property to the next owner.
  5. Compare against the listing: if it says 3BR/2BA but the permits only show 2BR/1BA, the "bonus" rooms are probably unpermitted.
  6. Cross-check the legal unit count on the 3R against what you saw on the tour.

Unpermitted work, the most common SF problem

The usual cases are a downstairs bedroom and bath, a garage turned into a "family room", an attic "office", or a whole in-law apartment. What it can mean for you:

  • Appraisal: appraisers may not count unpermitted square footage or bedrooms, which widens your appraisal gap (the difference between your price and the appraised value).
  • Insurance: claims involving unpermitted work can get messy.
  • Resale: the next buyer reads the same records.
  • Forced legalization: under SF ordinances that took effect in fall 2025, if Planning finds an unauthorized dwelling unit while reviewing your future permit, legalization is generally mandatory. Removal is rarely approved, and unauthorized removal can draw reported fines of up to $250,000 per unit. Legalization often costs $100k+. See Property types.

Don't ignore it. Put a price on it. Get a contractor's estimate to legalize (or the honest answer that it can't be legalized), and count that as a cost in your offer.

Earthquake, flood and other hazard checks

Liquefaction and earthquake zones

Liquefaction is when loose, wet ground acts like liquid during a strong earthquake. Large parts of the Marina, SoMa, South Beach, Mission Bay, Dogpatch and pockets of the Mission sit on bay fill or former marsh, inside California Geological Survey (CGS) liquefaction zones. The NHD will flag them. You can also check yourself with the CGS EQ Zapp map or USGS liquefaction maps. Liquefaction doesn't have to end a deal, but it affects foundation type, earthquake insurance pricing, and (for towers) building-level engineering. See Insurance & earthquakes.

Soft-story program

A soft story is a weak ground floor, often a garage with open walls, that can collapse in a quake. SF's Mandatory Soft Story Retrofit Program (2013) covered wood-frame buildings with 5+ units, 2+ stories over a soft or weak story, permitted before Jan 1, 1978. All compliance deadlines have passed. As of early 2025, about 4,655 of roughly 4,941 buildings were reported complete and enforcement continues against the rest.

  • Buying in a 5+ unit condo or TIC? Confirm the building has a certificate of final completion for the retrofit. Check the DataSF soft-story map.
  • Buying a single-family home or a 2–4 unit building over garages? It isn't covered by the mandate, but it may be structurally soft-story. A voluntary retrofit often costs less than people expect, and it can earn an earthquake-insurance discount. Get a quote from a seismic retrofit contractor →.

Flood

SF requires disclosure if a parcel is in the SFPUC 100-Year Storm Flood Risk Zone, which is defined by stormwater flooding at least 6 inches deep, not by tides. Check FEMA zones too. Sea-level-rise exposure is concentrated along the bay shoreline (Mission Bay, the Embarcadero, Dogpatch, Bayview/Hunters Point, Treasure Island).

Items the seller must handle at sale

Water conservation certificate

Under the SF Housing/Building Code, sellers must bring plumbing fixtures up to standard before title transfers, and a certified inspector issues a recorded certificate of compliance. Stricter standards took effect May 15, 2026, reportedly: showerheads and faucets at 1.8 gpm (gallons per minute) max and toilets at 1.28 gpf (gallons per flush), with DBI granting a temporary exemption that lets existing 1.6 gpf toilets pass. This is the seller's job. Just confirm the certificate is in the packet. SF also used to require an energy-conservation (RECO) inspection at sale. Ask your agent or DBI whether it still applies.

Lead paint

Housing built before 1978 gets the federal lead disclosure plus a 10-day opportunity to inspect, which buyers commonly waive in SF. That covers nearly every Victorian, Edwardian and Doelger. You'll feel it later: SF requires lead-safe work practices when renovating pre-1979 buildings (especially exteriors), which adds cost and time to any paint or window project. See Renovating.

Smoke and CO detectors, water heater strapping

State law requires these at sale. They're cheap, and they usually show up as a line item in the inspection report.

HOA documents (condos)

California requires sellers to deliver a set list of HOA documents (Civil Code §4525). Spend your time here:

  • Budget and reserve study: percent funded, and the planned big-ticket projects
  • Special assessments, levied or under discussion
  • Last 12–24 months of board minutes: search for leak, assessment, litigation, insurance, balcony, elevator
  • Pending or threatened litigation (often fatal to warrantability)
  • Master insurance policy: coverage, deductible, earthquake, recent premium changes
  • SB 326 balcony/exterior-elevated-element inspection report and repair plan
  • Soft-story retrofit status (5+ unit wood-frame, pre-1978)
  • CC&Rs: rental restrictions, pets, renovation approvals
  • Mello-Roos/CFD special taxes (newer downtown and Mission Bay buildings)

A few terms from that list: a reserve study estimates whether the HOA has saved enough for future repairs. CC&Rs are the building's rules. Mello-Roos, or a CFD (community facilities district), is an extra property tax that pays for local infrastructure. Warrantability means whether lenders will make standard loans in the building.

Send the litigation and insurance pages to your lender right away. A building-wide problem can sink your financing even if you love the unit. See Property types for more on warrantability.

How to read a packet in 60 minutes

  1. Minutes 0–10: the seller's own words. Read the TDS, SPQ and AVID first. Every "yes" is worth following up.
  2. Minutes 10–20: the money reports. Get the pest Section 1/2 totals, the roof's remaining life, the sewer-scope findings and any foundation letter. Write down a dollar figure for each.
  3. Minutes 20–30: the general inspection summary. Sort it into safety/structure, big systems and cosmetic. Ignore the cosmetic items.
  4. Minutes 30–40: the 3R plus a DBI lookup. Check the legal unit count, open or expired permits, NOVs, and whether permitted rooms match the listing.
  5. Minutes 40–50: hazards. Check the NHD liquefaction and flood flags, and the soft-story status for 5+ unit buildings.
  6. Minutes 50–60: HOA or TIC. Check reserves, assessments, litigation and the master policy, or the TIC agreement red flags. Send them to your lender and attorney.
  7. Total it up. Deferred repairs plus legalization plus any reserve shortfall is how much to take off your offer price. Then book your inspector or contractor walk-through.
Sources & verification›