DISCLOSURE OF SOBER-LIVING FACILITIES

DISCLOSURE OF SOBER-LIVING FACILITIES

What is a Sober-Living Facility?

A Sober-Living Facility is a group home for recovering alcoholic and/or drug users. These facilities are generally operated in residential areas by owners who purchase the homes with the intent to profit from the operation of these facilities.
Under California Health and Safety Code section 11834.22, Sober-Living Facilities which serve six or fewer persons are lawful and do not require disclosure unless they constitute a “nuisance” as described below.
Regardless of the technical disclosure requirements, I believe that the Agent must make a disclosure any time he/she is aware of a Sober-Living Facility located near the subject property to avoid litigation by unhappy buyers who discover the facility after moving in.
The technical disclosure rules along with recommended disclosure language are set forth below.

Agents Do Not have an Affirmative Duty to Disclose the Location of a Sober-Living Facility.

Civil Code section 2079 requires an Agent to disclose any “material facts” that affect market value or desirability.
The question is whether the State of California considers a Sober-Living Facility to be a “material fact?” Assuming that there are six or fewer residents, the use is considered “lawful” under current Health and Safety Code and does not require disclosure by the Agent.
In addition, the California Attorney General similarly advised in opinion 89-902 that the Agent does not need to disclose the existence of a Sober-Living Facility and states in pertinent part:

“the location of a licensed care facility is not a “material fact” required to be disclosed under California law.”
The general rule is that the Agent does not have an affirmative duty to disclose the existence of a Sober-Living Facility near the property being sold.
It gets worse, some courts have implied that it is discriminatory for the agent to disclose the location of such a facility in connection with a residential sale.
Regardless of the technical rule, and contrary to the Attorney General’s opinion, I recommend that the Agent always disclose the existence of a facility, but do it creatively by simply stating on your AVID:

“Seller reports possible commercial use of neighboring property.”

Agents MUST Disclose a “Nuisance” Created by a Sober-Living Facility.

While Agents do not have an affirmative duty to disclosure the location of a Sober-Living Facility, the Agent does have an affirmative duty to disclose any “nuisance” created by that facility.
A “nuisance” is generally defined as anything which interferes “with the comfortable enjoyment of life or property.” California Civil Code section 3479. The following are examples of a “nuisance” under California law:
1. Loud noise;
2. Obnoxious odors; or
3. Excessive traffic.

In addition, if the Sober-Living Facility houses more than six people, then it is not a lawful use of residential property (i.e. the Health and Safety Code only allows “six or fewer residents) and should also be disclosed.
Assuming that you observe a “nuisance,” then I recommend that the Agent make the following additional disclosure on the AVID:
“Seller advises of loud noise from house next door.”
“Seller advises of obnoxious odor from house next door.”
“Seller advises of excessive traffic from house next door.”

Conclusion.

If you represent the Seller, then regardless of the technical rule, I recommend that the Agent always disclose the existence of a facility, but do it creatively by simply stating on your AVID “Seller reports possible commercial use of neighboring property.”
If you represent the Buyer, then I recommend that you ask the Seller directly in writing whether he/she is aware of any Sober-Living Facilities near the property, and whether he/she are aware of any “nuisances” created by that facility.
These facilities are becoming very common in many communities located in Orange, Los Angeles and San Diego Counties.

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