The SF Disclosure Package: 3R Report, Pest, Pre-Inspections, NHD

Read the 3R report and the pest report first, then the seller's inspections, and only then the forms. A San Francisco disclosure package can run 300 pages, and the three documents that change the price are usually under 30 of them. You will typically have a week or two between release and the offer date, so the goal is a triage you can finish in an evening, with questions out to the listing agent by the next morning.

Why SF sellers disclose before offers

In most of the country the buyer gets disclosures after acceptance and inspects during a contingency period. In SF sellers commission inspections, order the city reports and assemble the package before the first open house, and buyers are expected to have read it before they write. That front-loading is why SF offers so often arrive with short or waived inspection contingencies. California law still gives you a three-day (in person) or five-day (mailed) right to cancel if a Transfer Disclosure Statement or Natural Hazard Disclosure arrives after you sign, but when you acknowledge the package with your offer, that clock is already spent. Your protection is the reading you do now and whatever contingency you keep; contingencies explains what each one is worth.

Reading order

1. 3R report
2. Pest (termite) report
3. Seller's general inspection and any specialty reports (sewer, roof, foundation, chimney)
4. Transfer Disclosure Statement (TDS) and Seller Property Questionnaire (SPQ)
5. Natural Hazard Disclosure (NHD)
6. Preliminary title report
7. Agent visual inspection disclosures
8. HOA documents, if a condo
9. SF-specific supplements: soft-story status, tenant information, local ordinances

The first three tell you what the building is. The rest tell you what the seller and the city know about it.

The 3R report

The Report of Residential Building Record comes from the Department of Building Inspection and sellers of residential property in SF are required to provide it. It shows the building's legal occupancy and unit count, the construction date, zoning, and the building permits on file. The first thing to check is the legal unit count against what you toured. A "single-family dwelling" on the 3R with a full second kitchen downstairs is an unwarranted unit. A three-unit building with four mailboxes has one too. The second check is permit history against visible work: a new kitchen, a bathroom addition, a deck or a garage conversion with no corresponding permit is unpermitted work you will own.

Two limits: the 3R covers building permits only, not plumbing or electrical, so a rewire or repipe will not show, and DBI's records are not always complete for century-old buildings. DBI charges a per-building fee (roughly $180 to $300; as of 2026-10-25, check the current Table 1A-G fee schedule) and turns most reports around within a couple of weeks, so a missing 3R is a question, not an excuse. Condo units have their own procedure under DBI Information Sheet G-27.

Pest reports: Section 1 versus Section 2

A California wood-destroying pest report is separated into two sections. Section 1 lists items where the inspector found visible evidence of active infestation, infection or resulting damage: termites, dry rot, fungus. Section 2 lists conditions likely to lead to infestation or infection where no damage was found yet: earth-to-wood contact, faulty grade, moisture at the foundation, missing flashing. The report ends with a bid to perform each item.

The Section 1 total is the number everyone negotiates around because it represents damage that exists today, and in old SF buildings with wood siding, decks and basements it can be large. Read the diagram, not just the total: dry rot at a deck ledger or a bathroom subfloor is a bigger story than a rotten fence post. Note what the inspector could not access, because inaccessible areas are where the next report finds the next total. Inspectors and specialists covers who to bring in for a second opinion.

Seller pre-inspections

Most SF packages include a general inspection commissioned by the seller, often a sewer lateral video and a roof report, sometimes an engineering letter. They are useful, and they are the seller's: the seller picked the inspector and the scope. Read them for what they flag and for what they skip; "not fully accessible" and "not entered" tell you where to look. Call the inspector, since most will answer a buyer's questions. If a sewer scope is missing on a pre-1950 house, ask the listing agent today.

TDS, SPQ and the agent disclosures

The Transfer Disclosure Statement is the state-mandated form where the seller checks boxes about systems, defects, additions and neighborhood nuisances. The Seller Property Questionnaire is the longer, more specific companion. Read them for the handwritten answers and the "yes" boxes, and compare them with what the inspections found; a seller who answers "no" to unpermitted work on a house whose 3R shows none for the new kitchen has told you something. Both agents also complete a visual inspection disclosure noting what they observed. These forms rarely contain surprises on their own, but they are the documents that matter if something was concealed, so keep them.

Natural Hazard Disclosure

State law requires sellers to disclose whether the property is in any of six mapped zones: a FEMA special flood hazard area, a dam failure inundation area, a very high fire hazard severity zone, a wildland fire area (state responsibility area), an earthquake fault zone, and a seismic hazard zone for liquefaction or landslide. A third-party NHD report does the mapping; if the map is too coarse to tell, the law requires the box to be checked "yes". A 2023 amendment (AB 1280, Chapter 99, Statutes of 2023) updated the fire hazard language so the statement specifies whether the property is in a high or very high fire hazard severity zone and whether that designation is in a state or local responsibility area.

In SF the boxes that matter are the seismic hazard zones. Liquefaction follows the filled land (Marina, SoMa, Mission Bay, the waterfront) and landslide zones follow the steep hills. Being in a zone does not block a loan, but it means new construction and most significant additions will need a geotechnical study, and it feeds earthquake insurance pricing; see earthquake insurance and SF red flags.

Title, HOA documents and SF supplements

The preliminary title report lists recorded liens, easements and covenants. Look for easements across the lot, recorded notices of violation from DBI, unreleased loans and anything that runs with the land such as a BMR restriction or a TIC agreement. If the home is a condo, California Civil Code 4525 requires the seller to provide the governing documents, the annual budget report with its reserve disclosure, a statement of current and approved special assessments, the HOA's litigation and violation disclosures, and, on request, 12 months of board minutes. How to read HOA documents is the next article for a reason.

SF adds its own layer. A pre-1978 wood-frame building with five or more units and three or more stories (or two over a basement) falls inside the mandatory soft-story retrofit program, and buildings that missed deadlines have been placarded and issued notices of violation; the package should show the compliance status. If tenants are in place, you want the leases, rent roll and estoppel certificates; see buying a tenant-occupied home. And any ground-floor space that looks like a unit deserves the unit legalization question: SF allows one unpermitted unit per lot built before 2013 to be legalized, with conditions, and a legalized unit cannot be condo-converted.

A triage checklist

Sort every finding into four buckets before the offer date:

• Price-changers. Unwarranted unit, large Section 1 total, foundation or drainage findings, soft-story work not done, a special assessment approved but unpaid. Each of these moves your number; test the adjusted price against closed sales in the comps tool and read how much to offer.
• Negotiation items. Roof near end of life, old water heater, sewer lateral with roots, deck repairs. Ask for credits or price them in.
• Deal-breakers for you. Litigation in the HOA, a protected tenant you cannot move, an easement through the garden you wanted, liquefaction if you need to do foundation work.
• Questions to send tonight. Missing reports, inconsistencies between the TDS and the inspections, anything "not accessible", and who did the unpermitted work and when.

Send the questions through your agent the same day. Listing agents answer the buyers who read the package, and your questions also signal that you will be a serious, low-drama buyer on offer day.