In California, with very few exceptions, the seller is legally obligated to disclose any and all material facts that may affect the desireability of the property for sale. This can mean almost anything... the neighbor's dog barks when a plane flies over, the toilet leaked 2 years ago but you had it repaired and have had no problems since. Even seemingly trivial things, if not disclosed, can come back to bite you.

Here is an example: A seller lists for sale an older home with a radiant heating system (i.e., a heating system where the water runs through pipes in the floor after being heated in a boiler.) The seller, an elderly man, thought the heating system worked just fine. The listing agent, new and inexperienced, did not order a radiant heat inspection (not required but it would have been a sensible thing to do.) The buyers purchased the home "As Is" but they also did not order a radiant heat inspection. About 3 days before escrow closed, the heat did not come on so the seller hired a professional to check into it. It turned out to be a little gas valve that had plugged. It was replaced, and the escrow closed.

Now, several months after the escrow closed, the buyers claim the heating system does not work. They have discovered the seemingly minor problem that ocurred (but was not disclosed to the buyers) just 3 days before escrow closed, and are now claiming that the seller failed to disclose a problem with the heating system. They are demanding that the seller replace the entire heating system, to the tune of about $20,000!

I have no idea how this is going to play out. The principals are not my sellers or my buyers (thank goodness) but I tell this story to reiterate to sellers how important the disclosures are.  A simple clogged gas valve (value about $150) would not have caused the buyers to back out of the transaction, but if it had been disclosed and acknowledged by the buyers, prior to escrow closing, the buyers would have absolutely no reason to make their current claim. "As Is" means "As of the day the contract is ratified." If malfunctions occur during the escrow period, the seller has an obligation not only to repair that item but to disclose the problem to the buyer.

The moral of the story is that it is always better to disclose everything, even seemingly trivial items, and let the buyer decide what is important to them or not.