According to the National Association of Realtors, up to 77% of home buyers will have an inspection of the house done before they agree to sign any documents and purchase the home. Home inspections are essential to ensuring you’re getting what you paid for and for avoiding nasty surprises in the future.
Fortunately, in the state of California, real estate law requires all residential real estate agents to disclose any defects or issues with the property before selling it to buyer. Failure to disclose defects of the property may result in criminal charges of misrepresentation, fraud, and/or deceit.
What laws protect me from an agent’s failure to disclose defects?
Laws pertaining to a failure to disclose defects regarding a property are the Common Law and the Statutory Law of California.
According to the Common Law of California, or Lingsch v. Savage 1963, the property seller and agent must inform the property buyer of all features or instances that may have impacted the value of the property.
These instances include deaths on the property, water damage, or pest infestations. Should the seller or agent fail to disclose this information before the signing of real estate contracts or in the contracts, they may then be held potentially liable for any damages.
Under the California Civil Code section 1102 in the Statutory Law of California, the seller of the property is required to procure a Transfer Disclosure Statement to the buyer in any document or real estate contract involving real property. The statement should include in-depth information about the property including natural hazard exposure, industrial use issues, dangerous conditions, physical burdens, etc.
Because of the extensive list of disclosures it may be in your best interest to have a real estate lawyer look over the document so there are no surprises later on.
Under what circumstances can I not hold the seller liable?
The seller of the property can’t be held liable for failure to disclose defects if the seller was not personally aware of the defects. However, there must be proof of an inspection having been performed in order to claim ignorance. If a reasonable inspection doesn’t reveal any property damage or issues and the property seller is unaware of the defects, they can’t be held liable in the future.
Additionally, it’s the property buyer’s responsibility to have the property inspected before purchasing. Under Loughrin v. Superior Court 1993, a seller can’t be held liable for failing to disclose defects of the property if the defects were easily visible or could be found during a regular inspection.
Only if the buyer has an inspection performed and the inspector is unable to locate anything wrong with the property and only if the seller is aware of the non-observable defects in the home can they be held liable.
Before signing a real estate contract with any property seller, it’s a good idea to have a real estate law firm look over the documents. Having an inspection performed on the property and a real estate lawyer California trusts analyze the finer details of the property transaction will grant you a better chance of being swindled.