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Nondisclosure Disputes In Real Estate Transactions

Last updated on March 1, 2021

Failing to disclose property defects or other material issues is one of the biggest sources of real estate disputes. The seller has a legal obligation to be transparent about defects that would diminish the value of the property or require a significant expense to fix, but buyers and sellers may disagree on what must be disclosed or whether a defect was adequately disclosed.

The Angell Law Firm, P.C., represents buyers, sellers and real estate agents in disputes and lawsuits alleging nondisclosure or similar fraud. Our lawyers are highly knowledgeable about residential and commercial property transactions, with broad experience in real estate litigation. We take cases in Contra Costa County and surrounding jurisdictions of Northern California. Call us today at 925-951-0796.

Failing To Disclose Material Defects

Under the California statute, sellers of single-family homes, townhomes and duplexes are obligated to provide a transfer disclosure statement (TDS). The purpose is to avoid fraud or misrepresentations and to allow buyers to make informed decisions about disclosed defects when entering purchase agreements. The TDS must include (a) meaningful disclosure of (b) known defects that will (c) affect the value or desirability of the property. Commercial transactions have a different set of disclosure rules.

Common examples of undisclosed defects and misrepresentations in residential property include:

  • Structural damage (foundation, load-bearing walls, roof)
  • Roof leaks or other water leaks
  • Toxic materials: lead plumbing, lead paint, black mold, asbestos
  • Electrical wiring that is not up to code
  • Property easements
  • Known boundary line issues or title defects
  • Property liens or pending litigation

Sellers cannot simply claim they “didn’t know” about an obvious defect or encumbrance if they reasonably should have known. On the other hand, buyers have an obligation to hire an inspector to conduct an inspection of the property and cannot rely solely on the TDS.

In other words, these disputes are not as straightforward as they might seem, and if you are involved in such a dispute, you likely will need experienced legal counsel to resolve the matter. Due to the complexity of these disputes, the earlier you obtain legal representation, the more cost-effective our help can be.

Remedies For Nondisclosure Or Misrepresentation

A buyer who has been defrauded through a failure to disclose is entitled to seek monetary damages from the seller and (if applicable) the seller’s agent. Compensatory damages are actual losses, such as the cost of repairs or code compliance upgrades, and/or the loss in market value due to the defect.

Punitive damages may be awarded in cases of egregious or malicious nondisclosure, to punish the fraud and deter such conduct in the future. The court can also rescind the purchase agreement and order reimbursement of any earnest money (down payment).

The Angell Law Firm, P.C., will examine the Transfer Disclosure Statement, inspection reports, and other evidence in your case and aggressively pursue your rightful compensation.

Find Out Where You Stand

If you were blindsided by undisclosed defects in a property purchase – or if you are unfairly accused as the seller of misrepresenting or failing to disclose defects – arrange a low-cost consultation and case evaluation with one of our attorneys. Based in Lafayette, we practice in Contra Costa County and beyond. Call our Lafayette office at 925-951-0796 or use our online form to briefly describe your situation.