Legal Question in Real Estate Law in California

My wife and I purchased 23 year old home in Granite Bay, CA. Seller did not disclose presence of expansive soils on site (and under home) even though he was told about them 14 years earlier by a geotechnical engineer, concealed a negative home inspection report from a sale that failed 3 months earlier and which showed high levels of mold and water intrusion under the house, did not mention the swimming pool cracks, both open and ones patched years earlier, pool leaks (into surrounding soil via the cracks), past roof leaks, and concealed stucco and drywall cracks, which resulted from the house settling due to expansive soils. His agent also lied about why the first buyer backed out, said due to financing problem when really due to the bad report.

Any fraud or deceit going on here? If so, can they claim because I'm knowledgeable about construction that I had no reliance on their disclosures? Damages are now at about $600,000


Asked on 8/14/17, 1:35 pm

1 Answer from Attorneys

Timothy McCormick Haapala, Thompson & Abern, LLP

Yes, real estate non-disclosures and cover-ups are a form of fraud. They can claim anything they want, but as far as failure to disclose, you will only legally be held to know about anything you either actually knew, or should have known based on your knowledge of construction, from reasonable visual observation prior to the purchase. If you had an inspection report done, you are held to know what was in it, an anything you should have investigated further based on it. When it comes to actual false statements, such as the reason the prior sale fell through, you are entitled to rely on those as long as a reasonable person in your shoes would have relied on them. You are not obligated to assume statements are false and investigate behind them, unless a normal person with your knowledge would not have believed them.

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Answered on 8/14/17, 2:17 pm


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