Each co-owner of real property in California is legally required to disclose any known material defects or issues that could affect the value or desirability of the property. This obligation to disclose is not only a legal requirement but also a matter of ethical responsibility to ensure transparency and fairness in real estate transactions. Similarly, co-owners who are aware of material defects will be required to disclose during a partition by sale.
What Defects Must Co-Owners Disclose?
The appellate court has provided that, “in California … [when a] seller knows of facts materially affecting the value or desirability of the property … and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer.”[1]Calemine v. Samuelson (2009) 171 Cal. App. 4th 153, 161.
These disclosures are required by California Civil Code § 1102. The seller must also disclose any easements that affect the interest in the subject property, room additions or altercations, structural modifications, flooding or drainage issues, hazardous materials on the subject property, nuisances, zoning violations, CC&Rs (covenants, conditions, and restrictions), and any lawsuits affecting the real property.
California’s Department of Real Estate provides a list of required disclosures when a seller transfers property in a real estate transaction. These disclosures require a seller to provide whether the property has significant defects or malfunctions in the interior walls, ceilings, floors, exterior walls, insulation, roof, windows, doors, foundation, slabs, driveways, sidewalks, fences, electrical systems, plumbing and septic systems.
The California Association of Realtors provides six disclosure charts for common transactions. Each co-owner of a property will be required to fill out disclosures based on their personal knowledge. Each co-owner will be required to fill out their own set of disclosures.
What are the Consequences of Failing to Disclose?
Pursuant to Civil Code §1102.13:
“any person who willfully or negligently violates or fails to perform any duty prescribed by any provision of this article shall be liable in the amount of actual damages suffered by a transferee.”
“Fraud or deceit may consist of suppression of fact by one who is bound to disclose it ….”[2]Miller & Starr, California Real Estate Digest, 3 Cal. Real Est. (3rd ed.) § 21. A co-owner’s “disclosure must be full and complete, and any material concealment or misrepresentation will amount to fraud sufficient to entitle the party injured thereby to an action.[3]Miller & Starr, California Real Estate Digest, 3 Cal. Real Est. (3rd ed.) § 21. Buyers rely on the information provided by sellers to make informed decisions, and any intentional concealment or misrepresentation of defects can be considered fraud.
Talkov Law’s Partition Attorneys Can Help
Failure to properly disclose known material facts can expose co-owners selling their property to legal liability and potential rescission of the sale. In a partition action, the property will often be subject to a partition by sale and it is crucial to work with a knowledgeable real estate attorney who can help you comply with all disclosure requirements. With nine, full time partition lawyers, Talkov Law is the #1 partition law firm in California and has handled over 450 partition actions throughout California. For a free consultation, call (844) 4-TALKOV (825568) or reach out online today.
References
