Legal Question in Real Estate Law in California
I sold a house in 2005 that was extensively remodeled. I hired licensed contractors who obtained permits from the city to do the work. The kitchen cabinets were replaced, the bathroom was remodeled, and the roof was replaced. I disclosed to the buyer that this work had been completed with permits that were obtained from the city. However, I simply forgot to get those permits finalized once the work had been completed, and thus I did not immediately disclose that fact to the buyer. A few months BEFORE escrow closed I sent, through my agent, supplementary disclosures to the buyer that the permits were obtained but they had not been finalized. She did acknowledge that she received the supplementary disclosures.
After the buyer bought the house she immediately lost the house in about 2 years. She provided falsified proof of income documents to obtain the loan and she ended up defaulting (I know this after doing my own research). A few days after she lost the house she sues me (seller), my agent, and my agents broker. Her lawsuit is extremely unclear and is frivolous. She is not an attorney and has a history of filing frivolous lawsuits (I've checked public records). Do I have any liability if I disclosed this fact to her before the escrow closed? The only mistake that I see here is that the real estate contract says that "Seller must send all disclosures within 7 days after acceptance of this offer." I did not disclose this fact in a timely fashion because I simply forgot about it. Do I liability here? She is claiming that I did not get the final inspection on the property because I knew it would not pass (all untrue and completely ridiculous). There were also inspections conducted on the property before the sale which show the house was fine.
Any input would be greatly appreciated. Please don't tell me to run to an attorney because if I had the money I would be doing that instead of explaining my problem here.
2 Answers from Attorneys
As always, it is risky to predict the liability exposure of a case based on a couple of paragraphs from one side, no matter how objective the author may be trying to be. With that said, however, I don't see how you have much if any exposure. The contract requires disclosures within 7 days, which I presume you did. There is also a continuing duty of disclosure of ommitted or newly discovered information. It would make no sense for that duty to exist if it was a breach of the contract to supplement the disclosures. The supplemental disclosures give her a new opportunity to cancel the contract. That was her remedy. She waived it. In addition, having lost the house to foreclosure she would seem to lack any damages or any standing to sue. Now here's the really good news. If you used the standard form Residential Purchase Agreement, and unless you had an addendum expressly excluding Paragraph 22, you have an attorneys fees clause. I have some junior attorneys associated with my office that I would like to get some litigation training. If you are interested, I believe we might be able to come up with a fee structure that would be entirely affordable for you to have representation to defend this case. If you would like to make an appointment to discuss that option, at no obligation, please give me a call.
I agree with Mr. McCormick, in that I don't think you are liable, based on what you have provided. The big problem that I see with her case is that she has no damages. If she had to pay to obtain inspections or clear permits, or had to have work redone, I could see an angle, but it seems to me that her loss was caused by her default.
There are attorneys who would take a case like this, and work with you to defend, and ask the court to sanction her. If she has a history of filing frivolous lawsuits, there is a procedure to have someone declared a vexatious litigant, in addition to other remedies.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
