In San Francisco and throughout the Bay Area, people who buy real estate are making a significant investment. This is true regardless of what they are buying – a residential or commercial property. It is important that both sides are aboveboard in the sales process to avoid disputes.
Unfortunately, disagreements do happen. It is always wise to be prepared for them. One issue that can come up in residential deals is if the seller does not fully disclose all information about the property. Seller non-disclosure cases can be complicated. The buyer and seller need to understand the law beforehand. When problems come up, they should also know their legal options.
A disclosure statement is a part of the real estate sale agreement
When there is a contract, the seller needs to make sure to provide the buyer with full disclosure about the property in a Transfer Disclosure Statement. That means if there are problems with it, the buyer needs to be fully informed about them before the agreement is complete. If, for example, there are leaks or other potentially costly problems, the buyer will not be walking in without this information and face repairs that might have precluded them buying the property at all.
This must also be done in good faith. If there were problems with the property that the seller did not know about and they were not discovered during routine inspections, then their failure to inform the buyer would likely not be viewed as non-disclosure.
They are also not legally allowed to hedge about issues with the property. That could include saying there is a problem with the property but not explaining how severe it is. The key to this is whether the seller intentionally tried to mislead the buyer to complete the sale.
Seller non-disclosure can lead to the buyer being compensated
If the document does not disclose all the issues that there are with the property, then the seller could face a legal filing and need to pay compensation to the buyer. In general, the buyer will have three years to make a claim from when they found the defect.
When the defect was concealed willfully, there could be more time granted to file a claim. Those who are in this situation whether it is as a buyer or seller need to understand the law for real estate transactions and have guidance with how to proceed.