Legal Recourse for Fraud in the Purchase of your Home

Full and complete disclosure in a real estate transaction is critical to the integrity of the sale of single-family homes. In the unfortunate event that a seller fails to disclose problematic information about a home being sold to an unsuspecting buyer, trouble ensues. When there is deception, California law has consequences. The buyer will need a real estate litigation lawyer.

The Real Estate Transfer Disclosure Statement

In California, real estate brokers and agents owe buyers something called a duty of care which holds the buyer to the same standards as the seller. For a buyer to claim damages, the deception must be known to the seller. This is the beauty of the Real Estate Transfer Disclosure Statement. It is an agreement between buyer and seller that states what was known about the property at the time of sale.

The Real Estate Transfer Disclosure Statement is about protection

The Real Estate Transfer Disclosure Statement is a comprehensive document that provides a line item for every surface, system and appliance included in and on the property. By disclosing and documenting any known issues in writing and then having the buyer initial the line item or items, the buyer will have no unwelcome surprises.  The Statement is  – the seller will be protected from liability.

Failure to disclose can include anything from a refrigerator icemaker that does not make ice to an odor or airplane noise that wafts over the neighborhood at regular intervals, a leaky roof, dry rot, an infestation, and structural integrity problems including a foundation that is slipping. There are other considerations.  Was there ever a house fire or natural disaster that caused damage requiring renovation? And what if there was a  pre-existing loose basement step or someone gets an electrical shock due to the previous owner’s shoddy unpermitted repairs?

Failure to disclose can be expensive business

When the seller is at fault for failure to disclose, legal cost for damages can add up. California law states that a seller who willfully or negligently fails their duty to the seller shall be liable for the amount of damages suffered by the buyer. The buyer can claim damages for whatever costs are required to repair the problem. The buyer also has the right to claim damages for any loss in property value resulting from the failure to disclose problem.

Hire a real estate attorney without delay

When presented with a potential statute of limitations issue, it is important to retain a real estate attorney  who has experience litigating real estate law. Experience means expedience and swift action is imperative.

How the dispute is resolved.

A real estate litigation attorney can help determine if there is a case to be filed in the superior court. If it can be proved the seller knew about the issue and concealed it from the buyer, fraudulent misrepresentation can be alleged.

California law provides for the buyer by awarding damages relative to the problem.  “A seller who willfully or negligently fails in their duty to the seller is liable for the amount of damages suffered by the buyer.” There are three categories of damages:

1. 1. Compensatory Damages – Covers out-of-pocket expenses the buyer must bear to repair the issue or defect. If the property value is decreased based on a specific issue or defect not disclosed, compensation will be provided.
   2. Punitive Damages – If a lawyer can prove that concealing the defect was an act of malice, fraud or oppression by the seller or their agents, punitive damages can be recovered. Punitive damages punish sellers for their malicious actions.
   3. Rescission – This is rare, but the buyer may be able to rescind the contract. This means they can force the seller to take the property back and return the buyer’s money.

The facts of every case are different.  Consult an experienced real estate attorney if you believe your home purchase contains problems that were not disclosed.

Know your rights. Protect yourself.