Legal Question in Real Estate Law in California

Refund Deposit for Non-Disclosure by Seller
Late in the escrow process (but before signing escrow instructions or releasing any contingencies) for a single family residence, we learned that a new subdivision plan was approved in 2005 to be built in a vacant field directly behind and adjacent to the property. The subdivision houses will block views, create less privacy, be a nuisance during construction and lower property values due to their smaller lot sizes. County records show that the Sellers were notified of pubilc hearings for the subdivision at least 3 time last year. These plans were not disclosed by the Seller during escrow. We sent the Seller a Cancellation of Contract and Release of Deposit form with a detailed explaination of the reason for canceling, but they have not responded. How strong is our position and is there any case law we can site to support it? The Sale Agreement calls for mediation of disputes. Would it be appropriate to put a lien on the property?

Asked on 9/12/06, 2:47 pm

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

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Re: Refund Deposit for Non-Disclosure by Seller

Are there brokers and agents involved? The duty to investigate and inform falls upon the real estate professionals as well as the sellers. The buyer's agent owes a fiduciary duty to use skill and diligence in learing the buyer's needs and investigating facts that bear upon the suitability of the property. The seller's broker or agent must inspect and report.

I'd say overall the case against the agents and the seller would be fairly strong, but maybe not quite airtight.

The appropriate next step for you is to retain a local real-estate attorney with some recent experience in these matters, and make a prompt demand for mediation. Your attorney should also advise you on how to avoid placing yourself in a position of possibily becoming liable for damages for failure to close if things turn against you, and advising yu on those risks, which seem slight to me based on the facts given, but need to be explored on your behalf.

Answered on 9/12/06, 3:52 pm

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