Suing a Seller for Non-Disclosure of Home Issues in California

Buying a home is one of the largest purchases an individual can make: buying a home. In California, sellers are legally obligated to tell buyers about material defects or problems with a property. If they do not the buyers could face unexpected repairs or safety issues, leading them to consider suing a seller for nondisclosure in California. Shapero Law Group specializes in real estate litigation, helping borrowers work through complex real property disputes.

Consequences of Lying on the Seller Disclosure

What if the seller lies on the disclosure form? California law requires sellers to disclose all material defects known to them. Not doing so can lead to legal consequences such as compensatory and punitive damages. Sellers who misrepresent or fail to disclose critical information may be sued by buyers seeking to recoup their financial losses. If the deceit is not discovered until after closing, sellers can also put the transaction in jeopardy, according to the California Department of Real Estate’s guide.

Also, lying on the disclosure form will affect a seller’s credibility and can cause problems in future transactions. Potential legal remedies include paying for the buyer’s repair costs, depreciated property value, and, in some jurisdictions, punitive damages meant to discourage such malfeasance. Under California Civil Code §1102, which governs disclosure obligations, sellers who intentionally misrepresent facts can face even greater penalties. According to a guide from the California Department of Real Estate, sellers could be liable to pay buyers for repair costs and other financial losses when they fail to disclose known defects.

Examples of Failure to Disclose

The types of information that could properly be withheld in a real estate transaction can vary widely, but common examples of non-disclosure would include details about past repairs, environmental hazards or deficiencies in significant systems. Such omissions could deceive prospective buyers, skewing a property’s value. Knowing these examples lets them see any possible warning signs, potentially safeguarding the consumer’s rights.

For instance, if a seller doesn’t disclose a pest infestation that has compromised the home’s structural integrity, the buyer bears the cost of repairing after moving in; similarly, non-disclosure of environmental threats nearby, such as soil contamination, can leave buyers to pay the legal and financial price.

Another: One of the most frequent is when sellers don’t disclose previous insurance claims on the house. Such claims are often symptomatic of prior damage, such as flooding or fire, that was not properly remediated.

What Do Sellers Need to Disclose?

In California, sellers are required to complete the Transfer Disclosure Statement (TDS), which lists any issues known with the property. Even if the problem has been fixed, sellers are required to disclose past repairs, defects and reports, according to the California Association of Realtors. If you think taking any action, I highly recommend you to not do anything until you know 100% what you are doing because giving incorrect information on this form can have dire consequences.

Sellers also need to disclose defects in major systems, such as plumbing, electrical and HVAC, and any legal disputes affecting the property. If there are any outstanding violations of the building code on the property, that must be explicitly stated so that there will not be any litigation in the future.

Sellers are also obligated to disclose hazards in the environment, such as closeness to earthquake faults or flood zones. Failing to report these hazards can blindside buyers to future risks and legal liabilities.

Property Inspection Responsibilities of the Buyer

Sellers must disclose, but buyers need to do their homework too. A professional property inspection is the best tool to identify potential problems before you close on a purchase. Buyers must read inspection reports carefully and request clarification on findings of inspection that are not clear.

Why is due diligence crucial? Even full disclosure isn’t guaranteed to expose all problems.

Buyers should also research the property’s history, including previous owners and lawsuits. That is a research process that can sometimes reveal red flags that sellers may not have disclosed, like work done without permits or unpaid liens.

Common Non-Disclosure Issues

#1. Mold Damage

Mold can be a serious health and structural issue. Sellers must disclose known mold issues, especially if the property has a history of water damage or poor ventilation. Buyers also have the option of requesting mold inspections and independent testing if any is found.

California law also contains restrictions when it comes to mold disclosures. The Department of Housing and Urban Development suggests that sellers make previous incidents, whether or not the mold was remediated known.

#2. Water Damage

Water intrusion means expensive repairs and long-term structural issues. Failure to disclose previous flooding, leaks, or poor drainage can lead to lawsuits if the buyer later finds hidden damage. Buyers should focus on places where water can pool, like basements and roofs, and request thorough repair histories.

#3. Structural Defects

Big structural issues, including foundation cracks or roof damage, can threaten a home’s safety and value. Sellers must disclose these problems if they are aware of them by law. Buyers should also check with structural engineers to confirm the integrity of older homes, particularly in earthquake-prone areas such as San Francisco.

How Are Money Damages Handled?

If a buyer obtains a successful judgment against a seller for failing to disclose a known issue, monetary damages may consist of repair costs, reduced property value, and even legal fees. If the seller’s actions were especially reprehensible, courts sometimes award punitive damages. The Department of Housing and Urban Development states guidelines on how to address property disputes, spotlighting the need for transparency in real estate transactions.

Additionally, California’s Consumer Privacy Act indirectly assists buyers in real estate disputes by mandating greater transparency in transactions.

If the non-disclosure caused an undue burden or personal hardship, buyers can also recover damages for emotional distress.

Suing the Seller for Non-Disclosure: The Process

In what way can buyers file a suit for non-disclosure? It starts with collecting evidence, like inspection reports, estimates of repairs and correspondence with the seller. Affected buyers should work with an experienced real estate attorney to determine their case and file a complaint in the right court. Depending on the language in the purchase agreement, mediation or arbitration may be required to resolve your dispute before it can go to trial.

The legal process could also include expert testimony, such as contractors or appraisers, to put hard numbers on damages and show the seller’s liability.

Contact Our Real Estate Litigation Lawyers in California

At Shapero Law Group, our experienced San Francisco real estate litigation lawyers provide tailored legal assistance for property disputes, contract issues, and foreclosure defense. Whether you are dealing with complex real estate conflicts or need guidance on property transactions, our attorneys are here to help.

Call us at 415-906-6134 to schedule a consultation and protect your rights. Contact us today to discuss your case and receive the legal support you need.

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