Legal Question in Real Estate Law in California

What is the statue of limitations regarding Real Estate and loan practices in California? In 2004 I bought a house from a company who flipped houses. The company was Sheryl LLC. They had a Real Estate Agent who showed me the house and guided me through the home buying process. Originally the house was listed for $179,000. But upon showing me the house the Real Estate Agent agent mentioned that it was a 3 bedroom and not a 2 bedroom as he previously thought and therefore the house would be higher price than what was originally listed on the flyer. But then he stated that although I was only qualified for $179,000 through the bank, the seller would carry the additional $40,000 as a silent 2nd. Which they did. I remember signing something agreeing to pay the additional $40 grand. However, no terms were ever established or implemented, or paid. There were a few other things that were promised that they failed to do like provide a home warranty and put the front lawn and fencing in between the front and back yard. So I never pursued establishing any payments and neither did they. I hv a feeling they went out of business. But I always knew if I were to ever sell my property I would owe them $40,000. Property records show I hv a $40,000 private lender loan on the property. My problems grew bigger when I had a small kitchen fire in 2009 and upon the Kitchen renovation inspection w/the City inspectors I was advised that the so called 3rd bedroom (the same bedroom that they increased the price of the property for) was constructed w/out permits. The kitchen Reno was red flagged and the job was stopped for a few months while the bedroom underwent structural inspection & etc... to assess the cost to hv it brought up to code or tear it down. It cost thousands either way that I didn't hv. Because I couldn't financially afford to bring the bedroom up to code or to tear the structure down, the city inspector allowed me to keep the structure intact w/a promise not to use it for living quarters and had all the electricity to the bedroom taken out and caped off to make it inhabitable. So, officially it is just a 2 bedroom 1 bath.

So, fast fwd to today. I hv been interested in taking advantage of new energy efficient programs (Hero) and a few others to make some energy efficient improvements to my home. But, that independent loan I hv w/the seller/flipper is killing my chances bc it's not verifiable since no terms were ever established. Since, the seller/flipper (Sheryl LLC) failed to disclose and subsequently raised the price on the home for an unpermitted bedroom I am not interested in establishing any terms. In fact, I feel I was purposely misled. Not only are they holding a $40,000 claim to my property, I will eventually hv to pay the cost to hv that bedroom brought up to code, not to mention the probability of having future stop work orders placed by city inspectors on any future projects because of that structure. And lastly the problems I'm encountering trying to take advantage of local or government programs to improve my property has become a reoccurring nightmare. For the most part, I need to know if I hv exceeded the statues of limitations for predatory business practices? And if I hv what is my recourse, if any? Any advise u can offer is greatly appreciated.

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