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What to do when a Seller Fails to Disclose a Home Defect?

Jan 18, 2021 | California

What does California law require a seller of a home to disclose?

California law requires any seller of a property to give potential buyers an accurate depiction of its condition, as well as disclose all known defects. Any agent or entity that sells a property and knowingly hides a defect to a buyer could find themself in legal trouble. 

No matter the defect in question, it is required that the seller knew about it or should have reasonably known about it in order for them to have to disclose it. This creates a legal grey area where sellers can avoid any fault for not disclosing damages for defects that are not always immediately apparent. For example, if the house has racoons, a buyer would argue that the seller should have known about the major issue, while a seller may argue that the defect in question never caused any issues until after the sale, therefore it is unreasonable for them to know about it.

What defects must be disclosed?

Given the broadness of the law, there are countless possible defects that would have to be disclosed in a real estate transaction. They are outlined in both state and federal law. Some common defects must absolutely be disclosed are:

  • Any structural issues
  • Water and plumbing defects
  • Pests, such as termites
  • The presence of mold or dangerous substances

Check your state’s laws to see if your state requires the disclosure of other specific defects. For example, California requires sellers to disclose whether a home is in a flood zone, and is also one of many states that requires realtors to disclose “stigmatized defects,” such as a death that occured in the home (even if it didn’t affect the property’s condition).

What can I do if a seller didn’t disclose a home defect to me?

If the seller of a property fails to disclose a defect to you, then you are eligible to receive compensation that is necessary to repair the defect, or in some cases, you may even be able to revoke the transaction entirely. 

It may be possible that a defect led to further damages to either their property or the person buying the house. For example, say a seller decides not to disclose an issue with the garage door opening and closing. When the new homeowner drives into the garage, it slams closed on the occupied vehicle, damaging the car and injuring the driver. The home buyer would theoretically be able to recover damages to the garage door defect, the damage to their car, and the damage to themself.