Legal Question in Real Estate Law in California

The big question here is where is the disconnect, as you pointed out. An attorney would want to see the actual listing, the purchase and sale agreement and escrow instructions, and any disclosures made to the buyer.

Mr. Roach is correct. A complete review of the documents and communications would be necessary in order to evaluate legal rights and recourse. Everyone seems to have a different story and the fingers will point in every direction with the real estate agent in the middle. Since there is a transaction pending that everyone seems to want to preserve, but disagreeing on when and under what conditions, this is a perfect situation for a mediated resolution. If your sister and her real estate agent are interested in help finding a mutually agreeable solution with the buyer, have the agent contact me. I have over 20 years of real estate litigation experience, am a certified mediator, and have served as a volunteer settlement judge for over 15 years.

First, if your sister has signed a "lease" with the tenant, as opposed to a month-to-month rental agreement, the tenant is entitled to possession of the premises until the expiration of the lease and a 30-day notice would be ineffective. If the buyer refuses to close escrow, your sister will need to give the buyer and its agent a notice to perform. If, after the expiration of the notice to perform the buyer still refuses to close, your sister may consider re-listing the property; however, whatever happens, your sister is probably going to wind up in litigation with the buyer, any potential new buyer, and probably both. As Mr. Roach suggests, you sister should take all of the documents relating to the sale and the "lease" to an attorney in your area so that the attorney can review all of the documents and advise her what her options really are.

In trying to analyze your facts, I've had some difficulty with the relative timing of the events and occurrences mentioned. Presumably, the buyer has made one or more inspections of the property, and would be presumed to have notice of things readily observable at the times of those visits, such as the fact that the property was occupied and that the occupants were not the owner/seller, and perhaps the fact that children were present. The buyer may also have been told that it was necessary to give 24 hours notice to the tenant before showing the property. All these factors may bear upon whether the buyer had prior notice of matters that the agents should also have diclosed (if they didn't) in writing.