Picture this: you’ve just moved into your dream home, and two months after settling in, the first rains arrive. To your surprise, the roof is leaking in your master bedroom. Is this a new leak? Or did the seller know about it and conceal the problem from you? When you had the house inspected prior to finalizing the deal, why didn’t the home inspector discover the leak?
These questions and concerns, depending on their answers, might lead you to consider legal action against the seller and maybe the inspector. Perhaps even the real estate agents involved — but first, you have to establish that they knew of the problem and hid it from you.
If you find yourself in this situation — you just purchased a home and now there are undisclosed defects that are proving costly — reach out to our firm, Wood Litigation, APC, today for help. We’re proud to work with clients in and around the greater San Francisco area, including the nearby communities of San Jose, Oakland, San Mateo, Santa Clara, and Alameda. We have decades of experience in real estate law and can evaluate your situation and present you with your best options.
California Disclosure Law & Common Problem Areas
California Civil Code Section 1102 requires sellers to disclose in writing any “material” facts that may affect the buyer’s decision to purchase the property or the amount that the buyer is willing to pay. Material facts concern conditions of the property’s walls, ceiling, fences, electrical systems, plumbing, and other structural components. These material facts are often disclosed to the potential buyer on a form called a “Transfer Disclosure Statement,” or simply “TDS.”
If a problem arises after you purchase the home, you can check the TDS. The form asks the seller if they are “aware of any significant defects/malfunctions in any of the following,” which leads to a list with checkboxes. If “roof” is not checked, then the buyer was either unaware of a defect or trying to conceal one. It’s important to note that the burden is on the buyer to prove that concealment was involved if they hope to recover compensation for any damages and loss of home value.
Who Is Responsible?
If there is concealment, the likely first responsible party is the seller. However, others may be responsible as well. The agents for the buyer and the seller may be responsible if they knew the seller was hiding a defect. The home inspector may also be liable if he missed such a glaring defect as a leaky roof. Matters can get tricky, however, as houses are expected to wear down and develop problems.
What if the roof started leaking six months after purchase and wasn’t evident until the third rainstorm? It’s unlikely the seller could be held liable for that, as the problem may have just developed. The same consideration may apply if the sewage system to the street is suddenly blocked up. The roots of the trees in the front yard may have been encroaching on the pipes for years, but they just now caused damage. Could the seller have foreseen that? These are all questions that require thorough investigating, preferably with an experienced California real estate law attorney.
Proving Liability
To prove that the previous owner is liable will likely require more than simply showing that he or she simply neglected to check the box next to the system that turned out to be defective. For instance, if you can show that the master bedroom roof leak had been covered up with a fresh coat of paint, that might help assign liability.
Interviews with neighbors might reveal that the previous owner had been dealing with a certain problem for a long time, a problem that was not disclosed on the TDS. If the owner relied on a certain repair person or company, they too might provide testimony about pre-existing problems.
What Can Be Done?
In some cases, the defect or problem may be covered by your homeowners’ policy or a home warranty that the seller-provided with the sale of the residence. In this case, you may be liable only for a deductible, though insurers are notorious for raising your premium once you take advantage of your policy’s benefits. If the defect is covered by warranty or insurance, and your home value isn’t affected, that may be the simplest and wisest solution.
If the defect is major and your costs are significant, the home’s value could be tarnished. In this case, you should consider holding the seller’s feet to the proverbial fire. You can start by drafting — with the help of an experienced attorney — a demand letter seeking compensation for your losses.
You could also choose to send the matter through mediation or arbitration, though you would have to get the previous owner to agree to the process and to abide by the result. Of course, there is always the court option. You can file a lawsuit and take the matter before a judge and jury, but keep in mind the caveats mentioned above about having to prove there was concealment.
How Wood Litigation, APC, Can Help
The attorneys at Wood Litigation, APC, have been involved in virtually every type of real estate legal issue in and around the greater San Francisco area for more than two decades. We will listen to your story, evaluate the facts, assess liability, and provide you with the best legal options going forward. Through it all, we will fight for your rights at every phase of the legal process.
If your new home develops a suspicious defect after purchasing it, you may well have a claim against the seller, the agents transacting the deal, and maybe even the person who conducted the home inspection.
Contact our office immediately, and let us determine if there was a willful failure to disclose a material fact that is now costing you money for damages and subsequent loss of value in your home.