If You Are a Seller and Have Knowledge of a Defect, It is known as a Seller Disclosure
Sellers, their real estate agents and brokers must follow a simple rule: They must disclose known material facts which substantially affect the value or desirability of a property before selling it. Otherwise, purchasers who later discover the undisclosed defects can take legal action.
Material property defects are generally anything that would affect a buyer's decision to buy the property at a certain price or on certain terms. Every state has its own laws on disclosures — and these laws do change — so it is a good idea to talk with an attorney about what must be disclosed and your rights as a purchaser of a home or condominium. Your real estate agent may have some answers, but a lawyer will be able to give you more in-depth information.
Material Defects
At Miller Law, Inc., in the Sacramento area, our attorneys represent clients throughout California who face litigation related to alleged failures to disclose. The disputes often center on whether or not non-disclosure occurred, as well as what was a "material" fact or defect.
There are many different kinds of material defects, including the ones listed below. After talking with your attorney, you may decide that these should have been disclosed — whether they were a problem in the past or are currently a problem:
- Toxic mold
- Roof and window leaks
- Slab, foundation, drainage and grading issues
- Termite or insect infestation
- Plumbing leaks
- Use of lead-based paint
- Death of someone in the property
- Pollution and other hazards
- Prior repairs
- Prior insurance claims
- Unpermitted repairs or additions
Responsible Parties
Responsible parties against whom a lawsuit can be brought for failure to disclose in a real estate transaction can include:
- The seller(s)
- The real estate agent and broker for the seller(s)
- The real estate agent and broker for the buyer(s)
- The home inspection company
- The pest inspection company
With respect to liability, the sellers must disclose material defects which substantially affect value and desirability. Both the real estate agents and brokers for the seller(s) and the buyer(s) must also make such a disclosure, but they also have an additional obligation to conduct a competent, diligent, visual inspection of accessible areas of the property to potentially locate such defects or problems.
Remedies for Failures to Disclose
In a real estate non-disclosure case, buyers who sue sellers over failure to disclose often wonder what remedies are available. It may be possible to settle or receive a jury verdict for the difference between the sales price and the actual value of the property when it was bought. This often equals the cost of repairs, calculated as of the time of sale.
To determine damage amount, our attorneys often consult with construction and real estate experts who can provide repairs, estimates and home values in the current market, as well as when the home was bought.
Contact Miller Law, Inc. toll free at 888-353-0285 or contact us online. Initial consultations regarding failures to disclose, real estate and other matters are free and confidential.
