Real Estate Fraud

 Purchasing a home is a stressful and complicated process. You’re faced with offers, counteroffers, contracts, escrow and a number of different disclosures. The seller’s failure to disclose is where issues typically arise in residential real estate disputes.

If there is a problem with the property, such as a structural defect, the seller has an obligation to honestly disclose that defect to any potential buyer. Unfortunately, sellers have an incentive to conceal problems with the property in order to obtain a greater sales price from you, the buyer. For this reason, California law mandates that seller formally disclose anything that adversely affects the value or desirability of the property.

If a seller fails to disclose, or actively conceals, problems that affect the value of the property, they are violating the law, and may be subject to a lawsuit for recovery of damages based on claims of fraud and deceit, misrepresentation and breach of contract. Of course, in order for a seller to be required to disclose an issue with the property, they must be aware of it.

The Buyer’s Responsibilities

Of course, just because the seller has an obligation to disclose issues with the property, does not mean that the buyer does not need to do their due diligence to ensure when purchasing a property. The buyer has the obligation to conduct a fairly reasonable inspection of the property. So, a seller cannot be held liable if the defect was readily apparent had a thorough inspection been conducted. Nevertheless, because there is great incentive to conceal issues with a property—whether it be a defective plumbing issue, or an undisclosed death on the property—there may be cases where a seller intentionally conceals a defect that would otherwise be observable, or only partially discloses a defect by downplaying its severity. In those cases, the seller can still be held liable.

Selling the Property As-Is:

As mentioned earlier, the seller has the obligation to disclose any issue with the property that can reduce the desirability or value of the property. Despite sellers’ attempts to sell a property “as-is” the obligation to disclose defects or other issues does not subside. If the property is sold "as-is" and the buyer later discovers an issue with the property that was neither disclosed or readily observable, then that issue is not covered by the "as-is" provision of the sale. In such a case, the seller may be liable for the loss in value of the property.

If you find yourself in a situation where you have bought property, and discover an undisclosed issue or defect, you should consult with an experienced attorney who can assess the situation and determine whether you have a potential case to bring against the seller or the seller’s real estate agent. Shoar Law Group has extensive experience in evaluating real estate disclosure cases. Mr. Shoar, prior to founding Shoar Law Group represented several large real estate brokerages and is familiar with the strategies these real estate brokerages use to conceal issues that should have been disclosed to you.

If you have purchased a home and recently became aware of an issue with the property after the close of escrow, contact us immediately to discuss your legal options.