Profile picture for Elena I

Seller did not disclose significant reconstructions and structural modifications.

We found out that significant reconstructions and structural modifications were made to the property with no permit and were not disclosed by the seller. We made this discovery after we removed contingency but before the escrow. Broker represents both the seller and the buyer. We insist to get a deposit and the home inspection fee back since we would not make an offer knowing about these facts. What responsibility supposed to be taken by the seller and the broker? What our rights and options are?

Thank you,

Elena 
  • November 18 2012 - Castro Valley
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Answers (12)

Profile picture for Elena I
Connie, thank you so much. I found local board on the agreement as you suggested. I appreciate your example with the client who stayed in hotel because of unpermitted changes made to the property. It is good to know and be aware of. About not disclosed facts it is not I like it or don't. It is about making structural changes and not disclosing these facts. Especially because some of the changes made property weakened and even breaking its integrity. All of the changes connected with the lead paint since house built before 1978 and so cuts and demolitions supposed to be disclosed.

Here I would like to share info: 
http://www.biggerpockets.com/renewsblog/2007/10/22/real-estate-sellers-be-aware-of-property-disclosure-laws/ 

"Sellers (and possibly their agents) will be held liable for negligently or recklessly reporting/failing to report information or perpetrating a fraud by intentionally misrepresenting the condition of the property. 

The judgments that have been awarded in cases involving violations of the seller disclosure laws include: 1.) Monetary damages to the buyer so that the misrepresented condition can be repaired; 2.) Payment of buyer's attorney's fees; 3.) Rescission of the contract (thereby allowing the buyer to void the transaction). I can assure you that cases involving alleged misrepresentations by sellers and overzealous agents who are trying to make a sale are on the rise. Attorneys representing buyers in these matters are becoming very aggressive in order to protect their clients' investments. Many are seeking punitive damages against both the seller and the agent, and more and more agents are being held accountable for failing to instruct their client to disclose a known material defect of the property."

Thanks again, Connie, you are right about legal advice. What you and other people shared gave me a hope and way to do research. The biggest wealth is information.

  • November 18 2012
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Profile picture for Connie Klemme

it looks like you are still asking about how to find the local board.

Your agent is most likey a member of a local MLS which is managed by the local board.  If your agent calls themself a Realtor not just a real estate agent then they are a member of the board.  This board is a governing body that also typically handles the mediation.  It is very likely that your contract states the name of the board on the contract, and if you searched on the internet through the agent's website it most likely tells which board they are a member of.

Often, unpermitted changes cause title problems and prevent closing because title insurance won't be issued.  In addition to questions you might have after reading the disclosure laws you might also check on this matter.  I know that I have seen a buyer that had to say in a hotel for a few weeks after closing because when the city became aware that they had moved in and that there were unpermitted changes not only would they not sign off on the gas being turned on for the new people but they denied occupancy until inspections and permits were issued.  it was a huge pain and I don't remember the details of how it was all handled (not my client, someone else from my office) but point is....there is much to ask about issues regarding unpermitted work beyond whether or not you like it.

Real estate agents can't give legal advice, but we can provide information ans suggest resources for you to research etc.  if you need legal advice about what to do...that's when you do mediation or get an attorney.

best of luck, glad you got some info on disclosure laws.  Seems like California has the most detailed disclosure laws around.

  • November 18 2012
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Profile picture for Elena I
Thank you, Linda. Making research as suggested by SoCal_Engr - thank you again, under "California real estate disclosure law" I found 

Golden Gate University Law Review
http://digitalcommons.law.ggu.edu/cgi/viewcontent.cgi?article=1680&context=ggulrev 
 
State of California Department of Real Estate
Disclosures in Real Property Transactions
http://www.dre.ca.gov/files/pdf/re6.pdf

We definitely will dispute through the mediation when broker will be available. This is the best and simplest way to do. 

What is it SRPD's and how to find local real estate board you mentioned. Do you mean State Real Estate Board or something under it?
  • November 18 2012
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the sellers real property disclosures provided by the seller via the listing agent and made available to the buyer once their offer is accepted

any disputes are to be done through mediation... contact the local real estate board that governs your area...

the grievance committee will hear your side, their side and the sellers side...they can easily review the file to see what was disclosed by seller and acknowledged by buyer
  • November 18 2012
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Profile picture for Elena I
Linda, I missed your question about SRPD's. What is SRPD's stays for?

Thank you SoCal_Engr for your response. I will do research by your suggestion. I did but did not put such specific. All people who put here answers are my new friends.

What is the difference between legal advice and attorney? I read given me package. I see some help on it and hope on mediation process. But anyway if anybody has some answers, suggestions, please do post them. 

Information we found was available to the public and so to the broker. As soon as I disclosed what we found, info disappeared from the internet on the same day. It means it was known what and where we found info, which is sad.

  • November 18 2012
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Profile picture for Elena I
Linda, thank you. Contract has a paragraph of mediation between seller, broker and buyer. We did not have dispute with the seller and broker yet.  
  • November 18 2012
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Profile picture for SoCal Engr
Based on the history of these forums, you are not going to get legal advice - other than to seek the advice of an attorney. Aside from the fact that most of those posting on these forums are not attorneys, the laws vary from state-to-state and the specific applicability is going to be affected by the circumstances of your situation (and what, if any, verbal or written statements are involved).

You can do some of your own research by Googling "California real estate disclosure law". That would at least get you headed in the right direction.

As a generality, the broker is typically not going to be held responsible for items that (a) were not disclosed to them by the seller, and (b) are not notorious (i.e., so easily observed that there is no ability to deny knowledge of the condition).
  • November 18 2012
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if you want legal advice contact an atty...

what does your contract state re settling disputes?

were the structural modifications disclosed in the SRPD's
  • November 18 2012
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Profile picture for Elena I
Thank you Honesty Sells. I wish anybody with legal background or at legal least experience answer my questions and give an advice about rights. 


 
  • November 18 2012
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Profile picture for Honesty Sells
Elana, Cindy is correct.

If they are not willing to return your deposit & reimburse you for the home inspection your only recourse may be to seek legal advice.

Since you did not have a buyers agent and chose to use the listing agent you should take the information your getting from the listing agent with a grain of salt.

Perhaps you should bring this up with the listing agents Broker/Owner of the agents office.
  • November 18 2012
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Profile picture for Elena I
Thank you, Cindy. Broker seems to be an honest, knowledgeable and professional person. I do not believe that broker does not care about own professional reputation. If you know answers on my questions, please let me know. I will answer on your questions later on.
  • November 18 2012
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Well, since you chose to use the listing agent, I have to ask...What does she say? Also, how did you make the discovery?

Unfortunately, you may need to seek legal advice. Especially if you are not getting satisfactory answers from the agent. Many attorneys will give a quick initial phone consultation before requiring a retainer. 
  • November 18 2012
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