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Addressing Post-Purchase Problems for California Homeowners

William B. Hanley Dec. 29, 2018

Every day, homeowners throughout California discover problems with the homes they just purchased. Even worse, they have no earthly idea how to go about holding the seller (or other responsible party) financially accountable for the damages they’re now stuck handling.

If this situation sounds familiar to you — or if you’re trying to sidestep such an issue before purchasing a property — this article is meant for you. Let’s take a closer look at California property law and what it means for you as a home buyer.

Seller Responsibilities

When a homeowner discovers an issue with their new property, their first reaction is almost always the same: “Why didn’t the seller tell me about this problem before I bought the place?”

This reaction is understandable. After all, it’s pretty hard to believe that the previous owner failed to notice a serious plumbing issue, seasonally flooded basement, roof leaks or other obvious problems that you discovered upon moving in to your new home. And, if you had known about the issue earlier, you probably wouldn’t have paid so much for your home. Maybe you wouldn’t have purchased it at all.

Your instinct to blame the previous homeowner is natural and, in many cases, legally well-founded. Really, what it all boils down to is whether the seller knew about the problem before they sold it to you. If they did, then they have breached their “duty to disclose.” Where the seller knows of facts materially affecting the value or desirability of the property and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer.

In other words, they failed to disclose important property information with you, which means that you can hold them legally and financially responsible.

General Duty to Disclose

California real estate law revolves around the concept of a seller’s “general duty to disclose.” In other words, a seller must, by law, reveal any issues they’re aware of that might impact the value or desirability of the property. The seller is required to complete a Seller Property Questionnaire (SPQ) and disclose information required by law. For instance, if a seller is aware of any of the following issues but fails to disclose that information to you, you may be able to hold them liable in a California court of law:

  • Building violations, whether they’re the result of a recent architectural change or part of the original property design

  • Health hazards, which can include anything from in-home hazards (e.g. mold, asbestos, harmful chemicals, toxins, and/or minerals) to being located in a natural disaster area (e.g. a flood zone, fire hazard area, or earthquake fault zone)

  • Legal issues, like encroachments, easements, impending foreclosure, or an ongoing lawsuit such as a boundary dispute

  • Defects (including past defects that have been repaired) in heating, air conditioning, plumbing, electrical, roof, water, sewer, waste disposal, floor, appliances, foundation, soil, or drainage

  • Alterations, modifications, replacements, improvements, remodeling, or material repairs to the property

In addition to California’s general duty to disclose, sellers can also be held liable by their own additional contracts. For example, if a seller gives a buyer a warranty or guaranty before the purchase (a fairly uncommon occurrence except in cases involving new homes), the seller would be liable under the terms of that contract.

Home Inspector Responsibilities

"But," you say, “I had a home inspector. Can the home inspector have liability?” The answer is “yes.” California Bus. & Prof. Code § 7196 states that “It is the duty of a home inspector who is not licensed as a general contractor, structural pest control operator, or architect, or registered as a professional engineer to conduct a home inspection with the degree of care that a reasonably prudent home inspector would exercise.” A home inspector has an independent duty to competently perform a home inspection.

Real Estate Agent Responsibilities

“I had a real estate agent. And the seller had a real estate agent. Can the real estate agents have liability?” Again, the answer is “yes.” It is the duty of a real estate broker or salesperson to conduct a reasonably competent and diligent visual inspection of the property offered for sale and to disclose to that prospective purchaser all facts materially affecting the value or desirability of the property that an investigation would reveal.

How Much Money Can You Recover?

As a homeowner, the big question eating away at you right now is how much money you can get back for your disappointing real estate purchase. Obviously, the exact numbers are going to vary widely from case to case, but generally speaking, these are some of the possible damages that victimized buyers can claim depending on the specific circumstances of their case. You may be able to rescind the sale and get your money back. Or you may want to pursue damages such as

  • The difference between the price paid for the property and the true value of the property

  • The costs incurred for repair

  • Other consequential damages arising from the purchase

  • Attorney fees

Again, the amount of money you can collect to cover your property damages depends on the details of your case. As someone who purchased property in California, you have every right to pursue legal action against those who failed to warn you about problems that affect the desirability or value of the property before you made your purchase.

Your Next Steps

Whether you’re ready to pursue a real estate lawsuit or are preparing to buy a new home, the first thing you need to do is consult with an experienced California real estate attorney. As the sole attorney at William B. Hanley, Attorney At Law, I will gladly work with you one-on-one from the moment we meet to the moment your case is resolved. Don’t wait to get the legal guidance you need. Reach out today to schedule a consultation.