Full question:
We bought a small cabin and two adjacent lots in Big Bear California. The property was listed as a fixer upper and in as is condition. As we approached the end of escrow we were alerted by the Escrow Company that on of the lots had a lean against it set by the city for substandard conditions. The lien included all three lots and the cabin. After obtaining a copy of the lien and a letter sent to the owner from the head of the code enforcement department we read the following. The cabin we were in escrow on was deemed uninhabitable and to be demolished. The other choice was to disassemble it and rebuild the whole cabin to modern codes to the tune of $170,000.00. Other cabins of similar size are selling for $140,000.00 and are in good shape. The head of the code enforcement met with the owner at the property and discussed all of these details. I have a letter he sent the owner thanking her for meeting him and outlining all the details of the problems with the property. We are now forced to drop out of escrow and are out appraisal and escrow fees. Shouldn't this have been disclosed. Do we have any recourse to collect our losses? Isn't this a crime misrepresenting a property to this extent?
- Category: Real Property
- Subcategory: Residential Property Disclosure
- Date:
- State: California
Answer:
California requires a residential property disclosure to be made on a property that has no less than one or no more than 4 dwelling units, even if the property is sold as is Certain exclusions from the disclosure requirement exist The following transfers are exempt from
these disclosure requirements:
The sale of new homes as part of a subdivision project where a public report must be delivered to the purchaser or a public report is not required However, when such new homes are sold through a real estate broker, the broker owes the buyer a duty to disclose any material facts
which affect the value, desirability and intended use of the property;
Foreclosure sales;
Court ordered transfers;
Transfers by a fiduciary in the administration of a decedents estate, a guardianship, conservatorship, or trust except where the trustee is a former owner of the property;
Transfers to a spouse or to a person or persons in the lineal line of consanguinity;
Transfers resulting from a judgment of dissolution of marriage, or of legal separation, or from a property settlement agreement incidental to such a judgment;
Transfers from one co-owner to another;
Transfers by the State Controller for unclaimed property;
Transfers resulting from failure to pay taxes; and
Transfers to or from any governmental entity
In an escrow for a sale (or exchange) of real property where no title insurance is to be issued, the buyer (or both parties to an exchange) must receive and sign/acknowledge the following notice as a separate document in the escrow:
IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO INSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING
I am prohibited from giving a legal opinion, we are authorized to provide legal information of a general nature only If there was no violation of disclosure requirements, it may still be possible to have a claim based on breach of contract and/or fraud
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
