Legal Question in Real Estate Law in California

How did you find out one of the bedrooms was built without a permit [I assume it was a conversion of the garage into a bedroom]? You can try to get the Tax assessor to change his mind but his decision is based upon the sales price and not the number of bedrooms, so I doubt they will change the appraisal unless you can get the price down. Check with local brokers as to whether owners in that area have problems with a room not being permitted. Find out if the local entity would grant a permit and what they would require and how much it would cost. Contact the former owner and find out what their position is, why they did not tell anyone, any problems with it being unpermited is, etc.You probably have a cause of action for being mislead but the amount of damages is unclear.

It sounds to me as though this is not a case of illegal construction, rather a case of improper designation of the space in question. I assume you know which of the three "bedrooms" is at issue. The county is probably not regarding it as a bedroom because it lacks some feature, such as a closet or adequate window area. I doubt Mr. Shers' theory that it's a garage conversion; that would be too obvious to a buyer and garages aren't usually included in the house square footage. So, you may now own a house that you think has three bedrooms and the county thinks has two. This might be significant when the time comes to sell, but what real difference does terminology make, otherwise?

Whether you have a case against the seller depends upon a couple of things. First, sellers don't have to disclose what they don't know. If the house was sold to you by someone who really didn't know about this 3 vs. 2 discrepancy -- a nonresident owner, a bank, a trustee, for example -- you couldn't sue successfully for failure to disclose. Also, there is a question as to how you establish your damages, and whether they are sufficient to warrant suit.

If you were represented by a real estate licensee (e.g., a buyer's agent), you might also have a case against that individual and/or firm for failure to investigate and report. Again, proving damages would be a problem.