Legal Question in Real Estate Law in California
I am in escrow to purchase a property. The owner is also the listing agent and constructed the home. In the MLS listing the owner/agent stated the guest house is permitted. We based our offer on this and have paid out $1300 in appraisal and home inspection fees only to find out the guest house is not permitted and is an illegal use. This was not reported by the owner in their property disclosure either. The CA BRE tells me this is a clear case of misrepresentation but the homeowner will not make any repairs or obtain permits. They have served us with a notice to perform. Do we have any recourse other than backing out and losing the $1300 we have put into this?
2 Answers from Attorneys
You should not give up any of your deposit money under these conditions, as I would expect a court to rule in your favor on return of your deposit and cancellation of escrow. I would also expect a court to award you those costs spent if you were to sue for them. Therefore, you should serve the seller a written demand for your deposit and payment of those costs, You could and should file a complaint with the Dept of RE against the agent/seller for misrepresentation. I would expect that to result in quick resolution of your issue. If serious about hiring counsel to help in this, feel free to contact me. I�ll be happy to help fight and get the best outcome possible
Yes, you have the alternative of cancelling the contract demanding your deposit back plus the money you expended, and suing them for fraud if they refuse.
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