Legal Question in Real Estate Law in California

You apparently cannot sue the seller (i.e., take it to court), but opening an arbitration proceeding is apparently possible.

A seller must disclose material defects in a property if the seller has knowledge of them, but there is no duty to disclose things about which it has no information. Absentee owners, for example, probably have no knowledge and no duty to disclose the barking dog next door.

Whether going to arbitration to recover the cost of repairs makes sense or not is a question that cannot be answered without a lot more information, principally about whether the seller knew or should have known about the termite infestation and nevertheless failed to disclose it to the buyer. Did the seller live in the house, or is the seller a financial institution or an absentee owner?

I would talk to two or three local lawyers to see what they think. You can bring a claim in arbitration equal to your damages, which would be the cost of repairs, plus costs, fees and expenses, but your actual award may be smaller and you may have difficulty collecting.

One of the big questions that I have when I read your post is whether a termite inspection was done, and if so, what were the results?

I agree with Mr. Whipple that your dispute is governed by arbitration. If you sue, the other party would have the option of filing a motion or a petition to compel arbitration.

I agree with Mr. Whipple's answer. If you would like a no-obligation consultation in my San Francisco facility, please let me know.