Legal Question in Civil Litigation in California

Hi,

We have some serious non-disclosure issues around the new home we bought last year. The major ones are

1) Clear encroachment by neighbor on our property that we discovered after moving in

2) Litigation between neighbors on easement that we have parking rights to. One neighbour claims that the easement solely belongs to him and the other claims that it is an easement. The Grant deed given to us by the title company describes the parking lot as an easement that we have rights to. Litigation was known to both the sellers and their broker. This was not disclosed to us. (The week we moved in, the neighbour that is claiming the parking lot as his asked us to sign a letter giving up our rights to the parking easement and threatened to sue us.)

3) Lot size advertised was 47000 sq ft when it was sold to us. We discovered after moving in that 11 000 sq ft of it had been deeded to the county and this was NOT disclosed to us.

4) The space directly behind the property is marked as "Open Space Easement"in the map provided to us by the title company and we have access to it. However there is a dispute between two of our neighbors on this, one of them saying that it is not an easement and that it is simply open space and that therefore we need his permission to access it. The other neighbor says we all have access to it since its an easement. This dispute was also known to the sellers and their agent and not disclosed to us.

5) The space right behind our property is filled with poison oak and this not mentioned in the disclosure anywhere.

6)There are frequent deer visits that prevent us from planting/growing most varieties of flowering plants, fruit trees and vegetables. We found that all of the plants planted by the sellers before me moved in are deer resistant, which shows they knew about the deer. There is no mention in the disclosure about this. There is a serious gopher menace that wasn't disclosed either. Sellers laid a protective shield under the main lawn to protect it from gophers which shows they knew about that too.

Questions:

1) We believe we have a strong case against the seller, the broker and the title company. What is your opinion on how strong our case is? How do you suggest we proceed in this case (there is a mediation clause in the purchase agreement)? What is the likely value of the case if we seek to sue the title company and seller - can we seek punitive damages in addition to the concrete damages for the monetary loss on each item?

2) We're planning to meet the title company manager to discuss our issue. This is our first visit. Is it necessary to have legal representation when meeting him or to take legal consultation before meeting him?

Thanks in advance.


Asked on 9/17/09, 5:29 pm

2 Answers from Attorneys

I know you don't like the answers I gave before, but it isn't going to change by reposting your question over and over again, and no reputable attorney will give you a different opinion.

You need to start by looking at your preliminary title report from the title company and your title insurance. You will find that the encroachment and anything that would be revealed by a survey is excluded. You will almost certainly find that the legal description of the property conforms to the property you got after the partial deed to the county, and that the title company does not verify or insure against any shortages in square footage. If the litigation over the easement involved your rights, a "lis pendens" will be listed on the title report and insurance exclusions OR the title company intends to defend you. If your deed includes an easement to the open space, the title company will defend your rights. The parcel map doesn't say to whom the openspace easement belongs. If it's not in your deed, it's not you.

The title company has no duty to disclose anything to you if they are willing to assume the risk of insuring and defending against the adverse claims. If there are claims against your easment rights, absolutely take that up with the title company. I'm sure if they were not excluded from your policy, the title company will defend you or pay for any loss of value. That is the extent of your remedies against the title company.

As for your case against the seller:

1) You have to prove they knew something about the encroachment that you couldn't see for yourself. You will find in purchase and sale contract a provision that made it contingent on your right to inspect the property. You will then find another document you signed removing that contingency. If you elected not to inspect, or failed to notice things that were plainly visible or discoverable upon reasonable professional inspection, no one has any liability to you for any of them. Only issues that the seller knows about, that you did not know about at close of escrow, AND that you and your inspector could not have discovered by reasonable inspection, can give you a claim against the seller.

2) Not the seller's problem. Talk to the title company about defending you.

3) Are you sure that the lot isn't 47,000 sq.ft. AFTER the 11,000 sq.ft. deed? Is it really only 36,000 sq. ft? If so, you probably do have a claim against the seller on this one, probably both brokers too. Unless the ommission was intentional, though, you will be limited to the difference in the value of the property as advertised versus as deeded. In most residential cases that is not much, since it is the residence and the location that gives the property most of it's value, not the sq.ft. of the lot.

4) Already covered. If it's in your deed, and not excluded from coverage, the title company will defend your rights.

5) Did you really just not even look at the property? There is no duty to disclose what plants are growing wild in untended parts of a piece of property. You're supposed to look for yourself.

6) Same as 5.

Bottom line: Title company will defend your easement rights unless they were excluded in the policy, in which case they were disclosed. Everything else pretty much seems like your own failure to inspect. You released the seller from those things when you signed off on the inspection contingency. Look CAREFULLY at your paperwork about the land shortage, that might give you a small right of recovery. I'm sure the title company will be happy to help you look through everything to find the relevant documents. Be sure to bring everything to your meeting.

P.S. I used to be a Vice President and Litigation Counsel for Fidelity National Financial, parent of Chicago Title and Fidelity National Title, among others. I did not like working for them much. So I am definitely not on the side of the title companies. I'm just telling you like it is.

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Answered on 9/17/09, 6:07 pm
Herb Fox Law Office of Herb Fox

You may well have some valid claims. The strength of those claims, and their value, can only be determined by a thorough investigation of the history of the property and of your purchase, including but not limited to a review of the Transfer Disclosure Statement, marketing materials, your title insurance reports, etc.

A major concern, however, is your own due diligence. While the sellers and the real estate professionals have statutory and common law disclosure duties, you as the buyer also have investigation duties, and in particular, the duty to note conditions, problems and defects that are observable upon a reasonable inspection of the property. Any claims that you have against the sellers, the listing agent, your own real estate agent and/or others will be measured against your own reasonable investigation of the condition of the property.

I recommend that you immediately seek the advice of an experienced real estate attorney before proceeding any further.

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Answered on 9/17/09, 6:08 pm


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