Legal Question in Real Estate Law in California
Disclosure requirement
We've entered a contract as sellers of our townhome. The buyer has backed out the contract two weeks after clearing all contingencies claiming we had failed to disclose one of the pools in the complex was closed for renovation. The buyers were annoyed by a large gathering which occurred in the pool common area in front of our townhome. We had disclosed in several places in the TDS that noise was expected in this common area, but the buyer is saying that the other pool area being temporarily closed for renovation caused the unusual noise. Were we required to have disclosed the other pool common area was being renovated? Is this acceptable as a reason to back out of the contract? Can we get part of their deposit as damages?
Thanks!
1 Answer from Attorneys
Re: Disclosure requirement
I'd say this is what courts consider a question of fact rather than a question of law....so it would be up to the jury to decide. I'd further guess that most juries (or judges in a trial without jury) would say it was a flimsy excuse, and rule that it didn't merit disclosure.
There are two additional aspects that should be discussed here. One is whether the pool's temporary closure for renovation was obvious to a person making a reasonably-diligent pre-purchase inspection of the property. There is much less likely to be a requirement of disclosure of things which are obvious, or even where some circumstance would put the reasonably cautious buyer on what is called "inquiry notice," i.e., there's something going on here, I better inquire.
The second additional factor is whether the pool renovation would be complete or almost complete by the intended close of escrow. If the buyers would have to contend with one month of disruption, that's a lot less likely to call for disclosure than, say, if it were to be six months.