Legal Question in Real Estate Law in California
non-disclosed association pending lawsuit
Signed escrow papers and had home inspection done then received more papers from escrow but this time we were notified that the association is involved in a pending lawsuit. Had all inspections done and good will deposit sent and was not notified by sellers or agent that there was a problem.(Our agent had no idea and is trying to help) Escrow papers state consult an attorney before signing and finalizing escrow in regard to lawsuit. Is this legal? Are we responsible for any monies owed that insurance does not cover for this lawsuit if we buy this property? If so can we get out of this contract and receive our money back? (Good will deposit and inspections costs) Thank you for yout assistance.
4 Answers from Attorneys
Re: non-disclosed association pending lawsuit
As a member of the Association, you will be ultimately responsible for any judgment or settlement paid to the suing party. They are notifying you that there is a pending lawsuit. You should be able to get out of the deal since this can be considered a "material" fact influencing the purchase of the home which is only now being disclosed to the buyer. However, the purchase and sale documents and escrow papers will tell you how and what you need to do to stop the deal. Since it still is in escrow, there has been no final deal and it can still fall out of escrow. I would be happy to speak with you in detail about this. Please contact me at 1(800)76-JUSTICE or legaladvicenetwork.com. Thanks for inquiring.
Re: non-disclosed association pending lawsuit
Even if the association is in a lawsuit, that has to be disclosed, but may not obligate a member to any financial obligation. You should learn more about the lawsuit and our firm will be happy to review your documents and provide you with consultation should you wish to have your deposit returned.
Re: non-disclosed association pending lawsuit
wow, what is going on in your life, this is one of the first questions which i really don't understand but it intriges me --- if escrwo hasn't closed, depending on what the contract says or doesn't say maybe you can be extricated from the transaction wthout any or too much of a hit. i am in n. cal. and if you wish to call 925-945-6000 --- michael olden
Re: non-disclosed association pending lawsuit
A seller of real estate under a grant deed warrants, among other things, that he has "marketable title." This is a technical term that means, among other things, that title is not challenged by suit or threat of suit. If the sbject matter of the suit is sufficiently serious, this seller does not have marketable title and should not convey under a grant deed. In such a situation, you would be entitled to withdraw from the deal without penalty; in fact, you might be entitled to damages. Only a real-estate attorney with access to the lawsuit could advise you accurately.
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