Legal Question in Real Estate Law in California

You might have a claim for failure to disclose against the Sellers, but if they short-sold the property, odds are pretty good they are broke and don't have money to satisfy a judgment. The reason I say you may have a claim is that there are many variables that go into determining if a Seller failed to disclose a fact to you. If it was known to them, then yes, they had the duty to disclose it. Hopefully the red-tag has a date which will help you ascertain when it was placed. If that was during a time that the Seller owned it, presumably they knew about the problem and were legally obligated to disclose it. If, however, it was red-tagged prior-to your sellers owning the home, it becomes substantially more complicated. Did the seller ever attempt to fire the furnace, was it ever serviced, etc... The other factor is that during the course of your due diligence period (inspection, etc...), would a reasonably-prudent buyer have had the furnace inspected? If so, your claim gets much weaker. I suggest you contact a real estate attorney in your area to discuss the facts in much greater detail, and determine your rights.

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