Daly City 3R Report for a Home Sale: What It Can't Show

Ask around the Peninsula about what a seller needs before closing and someone will bring up the sewer camera. Pacifica requires it. San Mateo and Redwood City adopted similar rules after Pacifica led the way.

What Daly City requires instead is a document called the 3R, short for Residential Requirements Report, and the report has a limitation the city states in plain language on its own building division page: it will not show non-permitted improvements. That single sentence is the reason a seller can hand a buyer a clean-looking city record and still get a hard question from a home inspector three weeks later.

What the 3R Actually Checks

The requirement comes from Daly City Municipal Code Section 15.44, adopted as Ordinance No. 992. Before entering an agreement of sale on a residential building of three units or fewer, the owner has to obtain a 3R from the city and deliver it to the buyer before the sale closes. The report costs $124 as of July 1, 2025, and stays valid for six months from the date it's issued, according to Daly City's Residential Requirements Report page.

What's inside the report is narrower than most sellers expect. It lists permits, but only those issued after January 1989. It also carries enforcement history and zoning history, which is how the city tells a buyer whether the home's current use matches what's on file. If a room, a garage conversion, or any other improvement doesn't show up in that permit history, the city's own guidance says the likely explanation is that it was built without one.

That's a records check, not a walkthrough. Nobody from the city visits the house. The 3R tells a buyer what the paper trail says. It does not tell them what's actually built.

A Different Kind of Check Than the Cities Next Door

The contrast with neighboring cities isn't about which requirement is stricter. It's about what each one is designed to catch.

Pacifica adopted its rule first, after discovering that aging sewer lines were leaking untreated sewage into groundwater that eventually reached the ocean, according to reporting in Palo Alto Online. San Mateo and Redwood City followed with their own versions. Those ordinances exist because a cracked clay or Orangeburg pipe under a 70-year-old house is a physical hazard that a buyer has no way to see on their own.

Daly City's concern runs a different direction. The 3R exists to confirm that what's built on a lot matches what the city has on record, which matters most in a city where a large share of the housing stock predates current permitting norms. Peninsula cities take very different approaches to what a buyer needs protected against before they sign.

Where the Gap Actually Shows Up

None of this changes a seller's underlying disclosure obligation. California law still requires seller disclosures, regardless of what any city report does or doesn't show. The 3R isn't a substitute for that disclosure. It's a separate document with limits on what it shows.

In practice, the gap tends to surface the same way it does everywhere else on the Peninsula: not through the paperwork, but through the people looking at the house directly. A buyer's inspector notices wiring in a converted garage that doesn't match the rest of the home. A contractor pulling a permit for an unrelated repair finds no history on file for a room that clearly wasn't part of the original build. At that point, the 3R showing nothing isn't reassurance. It's confirmation that nobody ever filed for the work in the first place.

There's a smaller, easier-to-miss requirement that lives in the same part of the process. If a water heater sits in the garage, city ordinance requires it to be raised 18 inches from the garage floor to the flame or spark-producing element, and that adjustment itself requires a permit, according to the San Mateo County Association of REALTORS. It's a small physical fix, but it's exactly the kind of item that gets flagged during escrow if it was never addressed before listing.

What This Looks Like in the Current Market

The stakes of a mid-escrow surprise aren't the same at every price point, and September's closed sales make that clear. In the first three weeks of September 2026, Daly City recorded closings across a wide band. A home on Brunswick Street listed at $798,000 sold for $898,000 in 14 days. At the other end, a home on Harvest Street listed at $1,789,000 sold for $1,938,000 in 11 days. In the same window, a condo on Green Ridge Drive that first listed in April at $748,000 finally closed at $618,000 after 127 days on market, a reminder that not every Daly City listing moves in two weeks even in a competitive city.

That spread matters because a late-surfacing disclosure item costs more the higher the price and the more financing is involved. A buyer paying cash for a starter home can absorb a few extra days of back and forth. A buyer financing a home near the top of the current range has a lender and an appraiser in the loop too, and either one pausing over an unresolved question adds real time to a deal that was otherwise on pace to close in under two weeks.

Before You List

The practical fix is straightforward. Order the 3R early enough that its six-month window doesn't expire before closing. Walk the property with an eye for anything that looks like it was added without a permit, a converted garage, a room addition, a bathroom in a space that wasn't originally built for one, and check it against what the 3R actually lists. If the water heater is in the garage, confirm it's strapped and raised to the required height before a buyer's inspector finds it first.

Lining up the paperwork and the property before a buyer starts comparing them keeps the 3R, the disclosures, and the house telling the same story.

Does the six-month validity window matter if my sale takes longer than expected? Yes. The six-month validity window is worth keeping in mind if escrow runs long.

Should I get a sewer scope anyway even though Daly City doesn't require one? Some buyers still expect one given how common the practice is elsewhere on the Peninsula, and older laterals in Daly City are subject to the same age and material issues that prompted neighboring cities to adopt the rule in the first place. It isn't mandatory here, but it isn't unusual to see it requested during a transaction.

If you're weighing when to list a Daly City home and want to make sure the 3R timeline, the permit history, and your pricing strategy all line up before you go live, the Archini & Sebastian Group can walk through your specific address and put together a current home valuation alongside it.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.