Legal Question in Real Estate Law in California

As Is/Disclosure

Purchased home 4 months ago ''as is'' for 920K. Broker stated bathroom/kitchen re-model was done by Seller who is ''licensed contractor''. Remodel was satisfactory per Home Inspector. Recently discovered shower pan leaking under bathroom, spreading to master bedroom and closet damaging wood flooring and walls. I discovered today no permits were pulled for any remodeling by seller. Seller checked ''no'' box on Seller Disclosure Statement Item #4: ''Are you aware of any room additions, structural modifications or other alterations or repairs made without necessary permits?'' Are Sellers/Broker liable?


Asked on 4/23/07, 9:23 pm

2 Answers from Attorneys

Mark Leonardo Law Office of Mark J. Leonardo

Re: As Is/Disclosure

It sounds like you have a very strong claim against the seller, particularly if he/she falsely checked "No" on the box asking about unpermitted alterations.

A seller has a duty of disclosure which is unaffected by an "as-is" clause, and is required to disclose all material information that he/she is aware of.

Often, it is difficult for a buyer to prove that a seller was actually aware of the defect which the buyer discovered after the purchase.

Based on the facts you present, it appears unquestionable that the seller was aware of the fact that the remodel was done without permits.

Whether or not the seller knew of the leak is another issue. I would need more facts to make that determination. However, if the seller is the one who installed the new shower, you may have a good negligence cause of action for any defects in his/her work.

Finally, it seems as if you may have a cause of action against the seller's agent, if you can show that the agent knew of any of the defects.

We handle many real estate cases. Feel free to contact us for a free consultation.

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Answered on 4/24/07, 10:27 am
Daniel Harrison Berger Harrison, APC

Re: As Is/Disclosure

Believe it or not, this is a multi-faceted question.

First, selling a home "as is" does not relieve the seller of the legal obligation to disclose known defects. Thus, if the seller knew of the condition, and failed to disclose it, then the seller would be liable. The claims would be breach of contract and perhaps fraud.

Second, the failure to obtain permits, by itself, may or may not have led to the leak. At any rate, you could sue the seller for breach of contract or fraud to recover any damages you suffer getting the home properly permitted.

Third, you likely have a claim against the contractor for negligence. (In this case, the contractor is the seller). The negligence claim would seek to recover any damages you suffer as a result of repairing any property damage caused by the leak.

The fact the Home Inspector didn't catch the problem is not a big deal. Home Inspectors generally conduct cursory reviews of the property. Anyway, if the Home Inspector should have noticed the problem, you may also have a claim against that person as well.

We handle many real estate and construction related matters like the one you present. Feel free to contact us via email or phone with any questions.

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Answered on 4/23/07, 9:56 pm


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