Buying a home can be an exciting and intense process, especially in a competitive market. When you finally find the right place at the right price, you will make an offer that you hope the seller will accept. Then, if all goes well, you will get the keys at closing. However, before the sale goes through, the seller is under a legal obligation to tell you about any known problems or defects, so you know what you are getting. What happens if you buy the property and discover a significant problem after you move in? What are my options in California if the seller failed to disclose a material defect?
California Disclosures
Under California law, a seller must disclose the condition of the property to a prospective buyer and identify known defects. Sellers are required to provide the buyer with a Real Estate Transfer Disclosure Statement (TDS) as soon as practicable and before closing, describing the condition of the property. When a seller provides a buyer with a professional report or opinion prepared by certain experts, the data may be considered part of the disclosure. For example, if the seller recently had the home inspected by a pest control company that provided a report declaring it was free of termites, he or she may give the buyer a copy as part of the disclosure. The intent of these disclosures is to provide the buyer with fair notice as to what the buyer is purchasing before the sale is completed.
What is a Material Defect?
The definition of the term “material defect” has been shaped by both common and California case law. In essence, a material fact is something the seller knows would impact the home’s value or desirability. For instance, if the seller knew that the home flooded in the past, had termite damage, or had been treated for toxic mold before, these would be material facts. If the seller failed to disclose this information to the buyer, he or she could be subject to liability. Additionally, it is not enough for a seller to simply state, “as is,” on the purchase contract when conveying property. Using this type of language will not limit an owner’s liability if it is established later on that he or she knew about an undisclosed defect.
Proving Actual Knowledge of a Material Defect
Proving a seller’s actual knowledge can be difficult when the defect does not appear right away. For example, say you have been living in the home for several months and learn you have foundation damage. You may have one expert tell you that the problems would have been evident to the previous owner. However, another may report that it would be impossible for someone to detect the issue beforehand. There could also have been contributing factors such as drought or fault line activity in the meantime that may have led to the condition. Further, if a defect is to an inconspicuous or unseen area such as an air duct, interior wall, or slab, it may be challenging to prove the previous owner had actual knowledge.
Consult with an Experienced California Real Estate Attorney
When you have finally found the perfect home, gotten through closing, and moved in, it can be devastating to find that something is seriously wrong. If you are concerned that the seller and his or her real estate agent intentionally failed to disclose a material defect in your home, it is critical that you consult with an experienced California real estate attorney prior to closing or as soon as possible. Depending on your situation, you may need to pursue legal remedies in court. You and your counsel can examine the facts and determine your next steps.
Contact the Law Office of Raffy Boulgourjian
Attorney Raffy Boulgourjian is a California real estate attorney with over twenty years of experience representing clients in residential and commercial real estate matters. He has the knowledge and expertise to protect your interests during your California real estate matter. Contact Mr. Boulgourjian today to schedule a free legal consultation to discuss your California real estate legal needs.