Was there an omission in your transfer disclosure statement?

On Behalf of | Feb 5, 2020 | Real estate law |

Unless you have a background in construction or real estate, purchasing a new property leaves you largely at the mercy of the real estate professionals involved in the transaction and the party selling the property. Many people view real estate not just as a place to live but also as a substantial investment, which means they hope to maximize the returns on that investment when the time comes to sell their home.

That profit motive could lead otherwise upstanding individuals to do something truly unethical and actually illegal. They could intentionally leave a major defect off of a state-required seller’s disclosure form, called the transfer disclosure statement (TDS).

The California civil code requires that those selling real estate fill out one of these forms to the best of their ability. Choosing not to answer in regard to certain systems where the status is unknown is a legal option in most transactions, but intentionally misleading a potential buyer by omitting a known defect violates the law and leaves the buyer at a substantial disadvantage.

Did you discover an expensive issue after your purchase?

Real estate transactions in the Greater Los Angeles area are incredibly competitive. People pay premiums for homes in move-in ready condition or in the best neighborhoods with good schools. As with any major transaction, if the price on the home you bought seems too good to be true, it probably is.

Few people want to walk away from a real estate transaction taking a loss based on their investment in the property. While such short sales do happen, they typically involve distressed properties or individuals who can no longer retain that real estate for legal or financial reasons.

If the seller does not disclose a major defect and then you realize shortly after you move in that the pipes in the home have corroded or the roof leaks whenever it rains, that could substantially diminish the value of your property and your ability to quietly enjoy your real estate. The more substantial and evident the issue with the property, the more likely it is that the seller intentionally did not disclose the problem in order to maximize their return on the transaction.

What are your rights when a seller lies about a property in California?

When a seller intentionally leaves a known defect off a TDS prior to the sale of a property, the person who bought the property may have the option of holding the seller legally responsible for their omission. In some cases, such an omission could constitute fraud and even lead to criminal proceedings. In most cases, your best solution will be to bring a civil suit against the seller.

Demonstrating that the property issues would have taken years to develop or that other people, such as neighbors or area contractors, knew of the issue could make it impossible for the seller to continue to claim that they were not aware of the defect. You may be able to recover the cost to repair the defect or the difference between what you paid for the property and what it is really worth based on the issues not disclosed in the initial transaction.