You have an obligation to make a complete disclosure of what you know. This is clearly a material fact. If you fail to disclose it, you are likely to be sued by the Buyer when it is discovered and the damages and attorneys fee awards could be substantial.
This answer does not constitue legal advice, nor does it creat an attorney/client relationship. If you are seeking legal advice upon which you intend to rely, you should hire competent cousel familiar with this area of the law in your locale.
As someone who has represented parties in over 150 cases involving non-disclosure of defects in residential properties, I would strongly recommend that you disclose any condition that you know that might affect someone's decision to buy the property.
Fraud can be committed in one of two ways - by stating something that you know to be untrue and by failing to speak when you know a material fact.
I am not a CA attorney, laws vary from state to state, therefore you should always consult a local attorney.
If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.