Legal Question in Real Estate Law in California

Failure to Disclose
After our physical inspection was completed we found out from neighbors there was a good chance our house had some aluminum wiring, as did most of the houses in the neighborhood. Aluminum wiring is now banned and requires retrofit to avoid fire hazard. We requested our inspector go back and take a better look and he did then find aluminum wiring. We subsequently found out the seller's real estate agent knew of this possiblity, and in fact he lives in the area and had his house retrofitted because of this problem. He also knew two houses in the neighborhood burned down due to this problem. The agent claims we must indicate to the seller each and every outlet, switch, and fixture that has the aluminum wiring. History of the area has shown it is different for each house and not consistent throughout the house. Since we already had invested time and money (inspection, appraisal, etc.), we felt the seller should pay for the retrofit, but they refuse. What recourse do we have? Is the real estate agent liable due to his knowledge and failure to disclose?

Asked on 6/03/02, 12:22 pm

2 Answers from Attorneys

Roy Hoffman Law Offices of Roy A. Hoffman

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Re: Failure to Disclose

The recourse you have may depend upon what the sale documents say. If the sale documents contain a provision making your purchase of the property contingent upon an inspection, and the seller refuses to correct the problems you have found, then you may be able to back out of the deal and demand a full refund of any deposit you made. There is generally a time limit on approving/disapproving conditions found on the property, and you must provide seller with notice of the conditions in writing. Whether you need to describe "every light switch and outlet" affected, is debatable.

If you suffer any damage as a result of an undisclosed condition of the property, and can prove that the agent and/or seller knew of the condition but failed to disclose it, then either or both may be liable for your damages.

You should immediately have an attorney look at all of your sale documents. An experienced real estate attorney can advise you about the obligations the agent and seller owe you, and what course of action you should take. This should be done promptly so that you do not give up any of your rights under the sale documents.

Answered on 6/03/02, 3:11 pm

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