Legal Question in Real Estate Law in California

Management obligations

Does a managment company have to legally disclose certain conditions of the house they are selling or sold??


Asked on 6/10/02, 6:43 pm

3 Answers from Attorneys

Ken Koenen Koenen & Tokunaga, P.C.

Re: Management obligations

If the management company is acting as the seller or agent of the seller, they MUST disclose anything they know about the property.

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Answered on 6/10/02, 6:51 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Management obligations

Assuming the management company is only that, and not an owner, it may not have a direct disclosure duty to a buyer, especially if it does not deal directly with the buyer.

On the other hand, the selling owner has positive duties to disclose after investigation, which would include obtaining information in the hands of its agents (such as the management company), and the management company would have a duty to its employer, the owner, to make those disclosures.

Therefore, the buyer might not have a direct action against the management company. It's a distinction based on a concept called privity. Parties that don't deal with one another aren't 'in privity' and hence are less likely to owe duties (of care, of disclosure, etc.) to one another. However, the buyer and seller are in privity and the seller and manager are in privity, and that's the way the disclosures should run and the manner in which failure to disclose is most easily enforceable.

Which is not to say a court couldn't find the mamagement company at fault in some way, such as being a party to fraud through a conspiracy of silence, or under a duty to disclose based on public policy considerations outside privity lines. It's just harder to make the case.

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Answered on 6/10/02, 7:10 pm
Larry Rothman Larry Rothman & Associates

Re: Management obligations

If you are selling property, you should disclose any negative conditions that you may observe. The standard realtor form will have the major areas of disclosure. If you have any questions, I can provide you with free consultation.

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Answered on 6/10/02, 10:20 pm


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