real estate disclosure
Q: My real estate agent has told me that I have a duty to disclose to prospective buyers information about defective conditions in my house, but why do I need to disclose such conditions when the buyer is hiring a home inspector and has viewed the house during an open house?
A: Under California’s Civil Code and common law, a seller of real property has a duty to disclose any fact that materially affects the value or desirability of the property, including, but not limited to, the physical conditions of the property. If the seller is found to have breached the duty of disclosure, the seller may be held liable for actual fraud, negligence, and breach of contract, and may have to pay punitive damages and attorneys’ fees in addition to compensatory damages. The buyer does not need to ask about such conditions of the property; instead, the seller has the affirmative duty to volunteer the information. The duty of disclosure exists after the purchase contract is signed and continues until the escrow closes. In addition to the common law duty, completion by the seller of a transfer disclosure statement is required for all sales of residential property, and it provides a check list of the most commonly experienced conditions and required disclosures. Continue reading