Legal Question in Real Estate Law in California
Disclosure Laws & Residential Purchase Agreement Addendum
Would you allow a client to sign the following: ''The provisions of this Addendum hereby supplements and are deemed to be incorporated into terms and conditions of the California Residential Purchase Agreement, a DRE form. To the extent that the terms of this Addendum and the Agreement conflict, the terms of the Addendum shall prevail and govern, and shall be binding and conclusive as to the terms between the above-identified parties. All remaining terms and provisions of the Agreement remain in full force and effect. The parties agree that Seller shall have no responsibility or liability pertaining to any disclosure requirements, or any other requirements whatsoever under this Paragraph, given that Seller has never lived at the Property and has no knowledge of the Property�s conditions or status. Buyer accordingly expressly hereby waives any rights for disclosures under Paragraphs XYZ of the Agreement. To the extent that waiver of certain disclosure requirements is prohibited by law, such disclosure shall be made by Mr. X, prior occupant of the Property, in writing to Buyer.''
This amendment also has the buyer recving keys & doing repairs prior to escrow closing. Withholding Tax paragraph 4 is deleted as well.
Thoughts?
3 Answers from Attorneys
Re: Disclosure Laws & Residential Purchase Agreement Addendum
Keep in mind that although a Seller is required to make disclosures, he may, in fact, not know of many defects since he has not lived at the property (If, in fact, this is the case).
Therefore, cover your rear by encouraging Buyer to have all available inspections, and having the Buyer sign a document which evidences the Buyer's decision not to get inspections that you have recommended (there is a C.A.R. form for this).
Re: Disclosure Laws & Residential Purchase Agreement Addendum
What a mess.
First, by statute, a provision waiving statutory disclosure rights is not enforceable. Don't even bother. You are asking for trouble.
Second, the seller has a duty to make certain disclosures. Period. The Seller should make the requisite disclosures and then advise the buyer to rely upon buyer's own investigation and experts. Buyer should be warned not to go hard on the deal unless/until Buyer is satisfied with condition of property and ready to waive contingencies.
Third, Buyer should NEVER be permitted to take possession and/or modify the property unless/until escrow closes, funds have been transferred, and title has been recorded.
Anything less invites litigation. As litigators that have seen many, many dispute arising out residential and commercial transactions, rest assured that the primary reason for disputes is (in our opinion) the seller's failure (or perceived failure) to disclose.
Re: Disclosure Laws & Residential Purchase Agreement Addendum
No.
I agree with Mr. Guerrini, wholeheartedly. By statute, people transferring residential property are required to make disclosures (in addition to material disclosures not required by statute, that would affect the purchase). These requriements are nonwaivable. "Any waiver of the requirements of this article is void as against public policy." (Civ. Code sec. 1102 subd. (c).)
The agreement appears to be unenforceable, in that the prior occupant is supposed to make the disclosure, yet is not a party to the agreement.
This addendum is trap for the unwary.
Very truly yours,
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