Purchase & Sale  ·  September 12, 2026

The Disclosure Form Stops at Four Units

On August 5, 2026, JLL Capital Markets announced it had arranged the $1.625 billion sale of an eleven-property, 3,620-unit multifamily portfolio across Southern California — The Camden in Hollywood, Camden Landmark in Ontario, Camden Crown Valley in Mission Viejo, Camden Hillcrest in San Diego, and seven others — from Camden Property Trust to a BlackRock-managed vehicle. JLL called it the largest multi-housing transaction in the United States since June 2024.

Three thousand six hundred twenty apartments. Not one Transfer Disclosure Statement.

That is not an oversight by anyone’s lawyers. It is how the statute is written. California’s residential disclosure architecture — the form most California homebuyers have signed, the natural hazard report that comes with it, and the broker’s duty to walk the property and tell you what they saw — stops at four dwelling units. Above that line, the buyer is on an entirely different body of law.

It is worth knowing which body, because it is older than the statute, in some respects broader, and it fails in a different place.

Where the line actually is

Civil Code section 1102 is the Transfer Disclosure Statement law. Subdivision (a) says the article applies to a transfer “of any single-family residential property.”

Read quickly, that sounds like detached houses only. It is not. Section 1102(b) imports the definitions from Chapter 1 of Part 1 of Division 4 of the Business and Professions Code, and Business and Professions Code section 10018.08 defines “single-family residential property” as “real property improved with one to four dwelling units, including any leasehold exceeding one year’s duration of such,” plus a unit in a residential stock cooperative, condominium or planned unit development, and a broker-sold mobilehome or manufactured home.

The four-unit ceiling has not moved. Assembly Bill 1289 replaced the old “not less than one nor more than four dwelling units” formula with the defined term effective January 1, 2019, and the defined term reshuffled the edges — folding in leaseholds longer than a year and restating the treatment of stock cooperative, condominium and PUD units and of broker-sold manufactured homes — but the ceiling is where it has always been. A duplex is covered. A fourplex is covered. A five-unit building is not. Neither is a strip center, an office building, an industrial parcel, or an eleven-property apartment portfolio.

Two companion statutes draw the same line:

• Natural Hazard Disclosure. Civil Code section 1103(b) applies the NHD requirement to “any single-family residential real property” — same defined term, same one-to-four-unit universe.
• The broker’s inspection duty. Civil Code section 2079(a) requires a licensed broker or salesperson to conduct “a reasonably competent and diligent visual inspection of the property offered for sale” and disclose what it reveals — but only as to “residential real property improved with one to four dwelling units or a manufactured home as defined in Section 18007 of the Health and Safety Code,” and only where that broker has a written contract with the seller to find a buyer or is cooperating with the broker who does.

On that last point a California court has said it in so many words. In Smith v. Rickard (1988) 205 Cal.App.3d 1354 — a 50-acre Santa Barbara County parcel with a residence, 12 acres of lemons and a 13-acre commercial avocado orchard that turned out to be infected with root rot — the Court of Appeal held that “the Legislature intended the duties set out in section 2079 to apply only to brokers selling residential properties of four or fewer dwellings, and not to commercial real estate transactions.” The court’s stated reason was that “a purchaser of commercial real estate is likely to be more experienced and sophisticated in his dealings in real estate and is usually represented by an agent who represents only the buyer’s interests.”

Mixed use: a wrinkle the Legislature muddied and a court just narrowed

If a single parcel has a commercial building and a residential duplex on it, is a TDS required?

In Richman v. Hartley (2014) 224 Cal.App.4th 1182 — a parcel on Oak Street in Ventura with exactly that configuration — the Second District said yes: “We therefore hold that section 1102 applies to any transfer of real property ‘improved with or consisting of not less than one nor more than four dwelling units,’ even if the property also has commercial uses.”

AB 1289 then added what is now subdivision (k) of Civil Code section 1102.2, exempting “[s]ales or transfers of any portion of a property not constituting single-family residential property.” On its face that looks like a carve-out for the commercial half. But the same bill added a second provision, now the second sentence of subdivision (m), stating that the changes AB 1289 made to that section “shall not be interpreted to change the application of the law as it read prior to January 1, 2019.” The Legislature added a carve-out and in the same breath disclaimed any change to existing law.

That tension is still unresolved. What changed last month is the consequence of getting it wrong.

In Nasey v. Fell Holdings, LLC (Aug. 10, 2026, A174623), certified for publication, the First District addressed two mixed-use San Francisco properties — commercial space plus residential units — on Fell Street and Stanyan Street. The buyer had lost the properties to foreclosure in 2020 and contracted to repurchase them from the foreclosure purchaser for $10.5 million cash. The agreement and its addenda were “as is, where is,” with no seller representations and with the sellers expressly relieved of any obligation to deliver documents or make disclosures. (A buyer cannot waive the TDS — section 1102(c) makes any waiver “void as against public policy” — but a contract can still allocate who bears the risk of what is not disclosed.) After the closing date had been extended repeatedly, the seller categorically refused to allow any Phase II environmental testing and declined to provide a TDS. The buyer took the position that the missing TDS excused his obligation to close.

The court rejected it. Assuming a TDS was owed, delivering it was not a condition precedent to the buyer’s duty to perform — the obligations were concurrent covenants, and nothing in the contract made the buyer’s performance contingent on receiving the disclosure. The court added that “to the extent either Richman or Realmuto would dictate a contrary result under the circumstances of this case, we decline to follow them” — Realmuto v. Gagnard (2003) 110 Cal.App.4th 193 being the case that had given a buyer the right to cancel over an undelivered TDS.

So the practical picture for mixed-use deals in California as of today: whether a TDS is required at all remains genuinely unsettled, and Richman has not been overruled — but a published decision has now declined to follow it on the point that matters most to a buyer, which is whether a missing disclosure buys you an exit. A buyer who wants the disclosure to be a condition of closing has to write it into the contract as one. The statute will not do it for him.

What a commercial buyer actually has

The absence of a disclosure form is not the absence of a duty. The rule that protects commercial and large multifamily buyers predates the TDS by more than twenty years.

Lingsch v. Savage (1963) 213 Cal.App.2d 729 — a San Francisco building with rental units, bought for $21,000, alleged to be in disrepair, to contain illegal units, and to have been placed for condemnation by the proper officials — states it:

Nothing in that sentence mentions dwelling units. It was written twenty-two years before the Legislature enacted the TDS statute, and it speaks to the seller of real property generally. Lingsch also held that a broker who possesses the same knowledge “is under the same duty of disclosure.”

The statutory hook is Civil Code section 1710, which defines deceit to include “[t]he suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact.” Note the second half. A seller who volunteers a partial engineering report, a narrowed environmental assessment, or a rent roll that omits the three units under repair may be exposed on the omission without ever telling an outright lie. Section 1572 covers actual fraud in contract formation, including “[t]he suppression of that which is true, by one having knowledge or belief of the fact.”

When the duty arises without a fiduciary relationship

LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336 identifies four circumstances in which nondisclosure is actionable fraud:

1. Where the defendant is in a fiduciary relationship with the plaintiff.
2. Where the defendant had exclusive knowledge of material facts not known to the plaintiff.
3. Where the defendant actively conceals a material fact.
4. Where the defendant makes partial representations but suppresses material facts.

Three of those four require no fiduciary relationship. They do require a relationship of some kind — LiMandri is explicit that the last three “presuppose[] the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise,” which in a sale means the transaction itself. A seller who knows the parking podium is failing, or that the 1968 electrical service will not carry a required upgrade, is in category two from the moment a transactional relationship with that buyer exists. The emphasis on exclusive knowledge matters: facts sitting in a public file the buyer could have pulled are a much harder case than a structural report that never left the seller’s desk.

What a plaintiff has to prove is set out in CACI No. 1901. The first element is a four-way alternative — a fiduciary relationship coupled with an intentional failure to disclose; a partial disclosure made deceptive by what was left out; intentional failure to disclose facts known only to the defendant that the plaintiff could not have discovered; or active prevention of discovery. From there: that the plaintiff did not know the concealed fact; that the defendant intended to deceive; that the plaintiff reasonably would have behaved differently had the fact been disclosed; that the plaintiff was harmed; and that the concealment was a substantial factor in causing that harm.

What “as is” does and does not do

Institutional purchase agreements are written “as is.” Sellers rely on it. The clause is not worthless — but it does not do what many sellers think.

Lingsch draws the boundary: an “as is” provision “means that the buyer takes the property in the condition visible to or observable by him.” It shifts the risk of patent, observable defects. The court’s illustration has been quoted for more than sixty years — such a provision “may therefore be effective as to a dilapidated stairway but not as to a missing structural member, a subterranean creek in the backyard or an unexploded bomb buried in the basement, all being known to the seller.”

Where the seller misrepresents the condition or “fails to disclose the true facts of its condition not within the buyer’s reach,” the court held, “an ‘as is’ provision is ineffective to relieve the seller of either his ‘affirmative’ or ‘negative’ fraud.”

Loughrin v. Superior Court (1993) 15 Cal.App.4th 1188 — a residential case, but stating the same common-law principle — put it in modern terms: even an expanded “as is” clause “does not address the issues of: (1) intentional misrepresentation, (2) fraudulent concealment, or even (3) negligent concealment not related to failure to inspect.”

An “as is” clause allocates the risk of what you could see. It does not allocate the risk of what the seller hid.

Where these claims actually get hard

Not on duty. On reliance — and this is the part commercial buyers underestimate.

Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289 shows how it goes wrong. It arose from a commercial lease rather than a purchase, but the reliance analysis is the same one a buyer will face. A retail tenant in Davis sued over representations about which other tenants would occupy the shopping center. Summary judgment for the landlord was affirmed. The lease contained an express non-reliance provision stating that the tenant “does not rely on the fact nor does Lessor represent that any specific Lessee of [sic] type or number of Lessees shall during the term of this Lease occupy any space in the Shopping Center.” The tenant had a lawyer look at the lease — though he asked only for a “precursor look” at “obvious improprieties,” not a line-by-line review — negotiated other terms, and never asked about the representations he later said he relied on.

Contract language is not automatically fatal, but it is worth being precise about which clause does what. In Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169, the California Supreme Court overruled a seventy-eight-year-old limit on the fraud exception to the parol evidence rule, confirming that evidence of fraud is admissible even where it contradicts an integrated writing. So an integration clause alone will not keep the fraud evidence out. Riverisland left the reliance element untouched, however, and a specific non-reliance clause attacks reliance directly — which is why Hinesley is still the shape of the defense motion: a targeted disclaimer, a sophisticated party, and a question never asked.

The counterweight is real. In Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, the California Supreme Court, quoting long-settled authority, reiterated that “[n]egligence on the part of the plaintiff in failing to discover the falsity of a statement is no defense when the misrepresentation was intentional rather than negligent,” and that “[n]or is a plaintiff held to the standard of precaution or of minimum knowledge of a hypothetical, reasonable man.” Reliance is ordinarily a question of fact. But the same passage carries the caveat: “If the conduct of the plaintiff in the light of his own intelligence and information was manifestly unreasonable, however, he will be denied a recovery.”

Sophistication is a factor in the analysis, not a bar to the claim. It is also the factor a defense lawyer will build the entire motion around.

Practical consequences

For a buyer above the four-unit line, the leverage is created before closing, not after.

1. Ask in writing, and ask specifically. The difference between a claim that survives summary judgment and one that does not is often a written question the seller answered incompletely. A general “as is” acknowledgment does not defeat a specific written misrepresentation.
2. Negotiate the non-reliance clause. It is the provision a defendant is most likely to build a summary judgment motion around. Carving fraud and intentional misrepresentation out of the disclaimer is a standard, negotiable request.
3. If a disclosure matters, make it a condition. Nasey is the lesson: a buyer who wants a missing disclosure or a refused inspection to excuse closing has to say so in the contract. Concurrent covenants are not conditions precedent.
4. Bargain for representations and warranties with survival. Contract remedies generally do not require proof of intent, and depending on how the representation is drafted may not require proof of reliance.
5. Preserve what the seller gave you. Partial reports, draft studies and marketing packages are the raw material of a section 1710 half-truth claim.
6. Watch the clock. Code of Civil Procedure section 338(d) gives three years for fraud, and the cause of action “is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” Courts read “discovery” as inquiry notice, so the period can begin before anyone has actual knowledge. Contract claims run on their own, different clock.

If this is your deal

Southern California transactions above four units close without the disclosure protections most buyers assume exist. If you bought a commercial or multifamily property and a material condition surfaced that the seller knew about, deadlines can begin running from the point a reasonable buyer should have suspected something was wrong — and the record built before closing is usually the most important evidence. ROMO Law Group handles purchase and sale disputes and seller nondisclosure claims throughout Southern California.

Attorney advertising. Prior results do not guarantee similar outcomes. This article is general information about California law, not legal advice, and does not create an attorney-client relationship. Statutes and case law change; confirm current authority before relying on any of it.