Legal Question in Real Estate Law in California
Misrepresentation of Property?
My brother and I are absentee co-owners of a
four-unit rental property in San Bernadino,
California which we recently placed on the market
through a local agency.
In the middle of the escrow process, the buyer
discovered that the manager of our property that
one of the units had been constructed without the
necessary zoning permits.
The unit had been constructed by the manager
himself in 1995 during the hospitalization of our
mother, who owned the property before we
inherited it from her.
Since we trusted the manager, we had always
assumed he had obtained the necessary permits.
The agency now claims that we willfully
misrepresented the number of units.
Although our listing with agency has expired, both
the agency and the buyer are demanding that we
accept a significantly lower offer. If we refuse the
offer, the agency says it will press for payment of
the full commission irregardless, while the buyer
will sue for damages and interest.
1 Answer from Attorneys
Re: Misrepresentation of Property?
On the facts presented, I have the following comments:
(1) Sooner or later, you are going to need legal representation.
(2) Retaining a lawyer now will probably save you money compared with waiting until lawsuits are filed, damages pile up, or evidence and witnesses disappear.
(3) The right lawyer is someone who practices real-estate law in the county where the property is situated.
(4) It does not seem that your representation was willfully incorrect, and you have a good chance of defeating that allegation.
(5) You may, however, have been negligent in making that representation. Therefore, you do need legal assistance and you cannot assume that the outcome will be 100% favorable.
(6) Ultimately, the manager is at the root of everyone's woes, and should bear the ultimate legal and financial responsibility. You might want to investigate whether this manager has done other improper acts such as skimming rents due you. In any event, the manager should be sued and/or added to any suit filed against you as a cross-defendant.
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