Legal Question in Real Estate Law in California
This is a question regarding non disclosure in California. My wife and I had a custom home built in 2005. Unfortunately, we were unable to stay in the area and sold the home in May of 2006. I recently received a letter from an attorney advising us that the buyers of the home were seeking a settelment from us, the builder and one of the sub-contractors. They state the issue with the house is that the concrete foundation is faulty and is allowing moisture to penetrate the flooring. My wife and I had no idea that anything was wrong with the concrete foundation when we sold the home. As such, nothing was noted on the disclosure portion of our real estate contract. However, when we lived in the home, the hardwood floor began to rise up at the joints in one area. When we contacted the builder, we were told that the floors were just expanding due to change in temperature and/or we had got moisture into the flooring by using a "wet" cleaning product. They fixed the floor and we never had another problem. So I have 2 questions:
1) Can we be sued for non disclosure if we had no idea there was an issue with the concrete foundation?
2) Is there a statute of limitations for this kind of law suit? We sold the house over 4 years ago and this is the first we have heard about it.
2 Answers from Attorneys
1) You can be sued for anything. We live in the most litigious society in the world. What you are going to do if you get sued is up to you.
2) Failure to disclose lawsuits are typically litigated under a theory of recovery called fraud. The statute of limitations for fraud in California is three (3) years. It starts to run when the defrauded party knew or should have known that they were defrauded.
Yes, you can be sued; the question will probably turn out to be whether you have one or more solid defenses. Certainly, lack of knowledge of a construction defect would be a defense to a suit alleging failure to disclose. You can't disclose what you don't know. The builder has exposure for up to ten years under Code of Civil Procedure section 337.15 for latent deficiency in the design, supervision, etc. of an improvement to real property, so they have greater exposure, I'd think, than you.
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