What are the central issues of a failure to disclose real estate dispute in San Diego or Southern California? Would it surprise you to learn that the National Association of Realtors recently published an article on the matter: “Top Claim Against Agents: Failure to Disclose”? The seller is the primary source of negligence in a failure to disclose dispute but there are often other parties who have contributed to the issues at hand and share in the negligence (and exposure to associated financial damages).
Protections for Buyers in a California Real Estate Transaction
One of the most common forms of commercial and residential real estate disputes is known as “failure to disclose.” California real estate law provides extensive protections for buyers in a real estate transaction. It places heavy requirements on the seller to fully disclose all known defects in the property, as well as any legal issues or liens that would affect the property in the future. These disclosures can be made after the potential buyer has submitted an offer, and even after a property inspection, but they must be made prior to the completion and signing of the associated purchase contract.
The seller is required by law to provide a substantially accurate and transparent insight into the both the land associated with the deal and the buildings or improvements which exist on it or above it. The seller is required to provide the buyer with a substantial formal disclosure known as the “Transfer Disclosure Statement” or as it is more commonly referred to as the “TDS.” There are many parties who may touch the TDS including the seller and their agents (realtors) as well as home inspectors and warranty agents.
What Are Some Of The Most Common Issues Sellers Fail to Disclose?
Issues associated with a failure to disclose real estate dispute in San Diego or Southern California include, but are not limited to:
- Roof leaks or water damage
- Modifications, additions or renovations made to the property without a permit or licensed contractor
- Electrical, Plumbing, Drainage, Sewage (Septic Tank) or other system related issues
- Mold
- Heating, Air Conditioning or Solar Power Issues
- The use of non-tempered glass on glass sliding doors or bathroom enclosures
- Fence lines or portions of building(s) that exist within or across easements or property lines
The seller must disclose all bankruptcy issues, even issues such as odd smells or neighborhood noise issues. Sellers must also disclose if a death occurred on the property in the past 3 years or any liens that are currently in place on the property.
The Crucial Elements in a Failure to Disclose Real Estate Dispute in San Diego
What are the crucial legal obligations and remedies in a failure to disclose real estate dispute in San Diego and Southern California? First and foremost, the buyer has an obligation to inspect the real estate in question prior to closing. This should include their own physical inspection as well as hiring outside professionals to inspect the property prior to close. The failure to inspect can be used against the buyer as a defense in a failure to disclose dispute.
The seller and their agents actually owe a legal duty of care to the buyer under California law. If the seller and/or their agents have failed to disclose issues or hidden defects within the property the primary remedy is financial damages. Compensatory damages reimburse the buyer for any out of pocket expenses required to remedy the undisclosed issue(s). Punitive damages are an additional form of punishment the Court may levy when the Court believes the seller and/or their agent(s) acted with malice. In a few cases where there are extensive and potentially irreparable issues the Court may offer the opportunity for “rescission:” in effect undoing the real estate transaction and restoring the buyer to a legal and financial position as if they had never entered into the agreement itself.
If you are considering the purchase of real estate in San Diego, or believe the seller has failed to disclose important information about a property you’ve recently purchased we invite you to review our Podcast Episode 8 – Real Estate Overview, the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
