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Many people are nervous about putting their house on the market because of the notion that California is a very litigious state.
They are right, California is a very litigious state: We have four lawyers for each 100 people in California so they are definitely looking for work.
The length of the sales contracts we use speaks to the number of lawsuits on the specific issues reflected in those contracts. Everything from Megan’s Law to mold to asbestos to disclosures of death on the property — it’s a byzantine mixture of pages and pages of questions and forms galore.
Even upon the exhaustive filling out of the forms and answering questions in a very thorough manner, you can still get sued. Unfortunately, nothing will make you completely bullet proof from an angry buyer. But there is an art to filling out the forms in such a manner that you will be better protected, and a good agent will guide you through the process.
Efram and his wife closed on their Atherton home in August. His brother (Noah) from Fresno represented them in the sale. On Dec. 18, Noah received a call from the agent who represented the buyer regarding a leak in the roof that “had obviously been there for years.” He went on to say that his buyers expected the sellers to pay for the repairs because the leak now had done extensive damage to the tune of $21,000.
Noah was pretty sure his brother had never mentioned a leak but called him to double check. Efram then recounted how he had mentioned a leak to Noah that had occurred about a year and a half before.
The leak had been fixed so Noah told Efram not to worry about it as it had been fixed and he didn’t need to disclose it. After much back and forth between the buyer and seller, Efram refused to pay or assist in the repair in any way. The buyers then replaced the entire roof and sued Efram for the cost of the entire roof — $34,000.
The first rule of disclosure is, if you have to ask if you should disclosure something, you just answered your own question. Efram should have made mention of this repair and, if possible, made note of what company completed the repair. With this simple bit of information, the buyer would have been put on notice with regards to the roof and had the opportunity to have it inspected or not.
Another protection that the seller could have provided would have been to place a Home Warranty on the property that can include the roof. This may not have provided 100% protection but would have been another measure to help the seller.
Additionally, there are numerous places in the state-mandated disclosures that should have tweaked the seller’s memory with regard to his previous roof repair if he had carefully and thoroughly read the questions. The forms are meant to protect both parties if used correctly.
When answering questions about the house, the large and expensive systems in the house should be given special consideration — the roof, the heating system, plumbing, electrical and even sprinkler systems. The money a seller pays to have upfront inspections is well worth the investment.
The time spent in fully and completely filling out any questions about the property is also well worth the time invested. Both should be looked at as insurance policies for the sale of the house.
Unfortunately, Efram ended up settling with the buyer for $28,000. Noah ended up feeling really badly.
Wendy McPherson manages about 145 agents for Coldwell Banker in two Menlo Park offices, plus Woodside and Portola Valley. She can be reached at WMcPherson@cbnorcal.com.
Wendy McPherson manages about 145 agents for Coldwell Banker in two Menlo Park offices, plus Woodside and Portola Valley. She can be reached at WMcPherson@cbnorcal.com.
“if you have to ask if you should disclosure something”
When did disclosure become a verb?
Mike
Math is hard:
Active Attorneys in California: 177,980 [1]
Current California Population: 38,000,000 [2]
That’s 4.6 per 1000 Californians, not 4 per 100.
[1] http://members.calbar.ca.gov/search/demographics.aspx
[2] https://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&met_y=population&idim=state:06000&dl=en&hl=en&q=california%20population
Noah must have felt really ‘bad’.
You can always sell your house “As Is”. Although having a warranty is a good idea.
Sellers should remember that disclosures are their friend! In following the letter of the law and disclosing the history of the home, even if they think it might be a detriment to the sale, the seller is best positioned to have a successful outcome. I tell all sellers that although the sometimes redundant disclosures may seem overkill, they are all a result of a previous law suit and are a tool to protect them.
Our California Association of Realtors Attorneys work very hard to cover as many issues as seemingly possible to facilitate a successful outcome and as a Realtor, we have the best of the best looking out for the consumer. If all parties do the ‘right thing’ in full disclosure, the chances of a sour result are significantly less. Integrity counts. For more detailed information, please contact me direclty; rhonda@rhondafee.com, lic. 01414989
Disclosures are something that your real estate agent should make sure you understand. I sold a house in Fremont, the new sellers seemed nice enough, I had known of the buyers agent for a long time, and expected the deal to go through without a problem. We disclosed everything we “assumed” was important to them. Well, evidently they thought all the furniture in the house stayed in the house. An example was a television I had on the wall, on a shelf, in my office. They wanted that “returned” after we moved out. As well as an antique dresser in the master bathroom, kids room drapes that were so cheap and old, we didn’t realize they wanted them. We were shocked at the stuff they claimed should have gone with the house. My agent even paid to have the entire inside painted due to pictures being removed from walls showing where they were hung. It was ugly, and I think their agent should have informed them from the git go how it is done here in the states. My lesson from that was never assume anything, and make sure the buyers know in full detail, any problems, and especially what is not staying in the house. Do not depend on the little tags agents tell you to put on things, have a written list so you have trace. It’s easier to spend a few hours on the computer writing it all out, then sitting in deposition answering stupid questions. You can never tell a buyer to much. And if you have a problem in the house, especially tell them about any problems you have had in the past. Any money you might save by not disclosing a problem you will end up paying later, or to an attorney.
Align yourself with a quality and well-referred Realtor and you should be OK with your sale. The “sting” of paying the commission is long forgotten if you take a short-cut and are the target of a lawsuit. How do you find a good Realtor – find out who others have used and then interview them to find out if their goals are your goals. The same holds true for other professionals in the real estate transaction.
what realtor knows my house was constructed with chinese drywall?
Years ago when I first started my career in real estate, my manager told of a 3 way test regarding disclosure.
1. Ask if the issue might matter to a buyer.
2. Ask if the issue might matter to a seller.
3. Ask if the issue might matter to a judge.
If you answer yes to any of those questions, disclose. Those questions have served me and my clients quite well for 27 years.
We thought about suing after learning that Idi Amin had moved just down the street from us only weeks before we purchased. We decided against the suit, and we haven’t had too much trouble since. Still, there should be a law about neighborhoods allowing foreign dictators into the community.
Sister Mary Faith at St Bernard’s taught math better than that Joe Crosslin. I got A’s. Maybe that’s why I’m retired now. That is 4.6 per thousand, not 4 per hundred.