What to Do If a Seller Conceals a Defect

When buying a house in California, you have a legal right to sue the seller if you discover a defect that your sellers seem not to have mentioned to you beforehand. It could be a new coat of paint hiding water damage and mold infestation. It could also be a leaking roof that is letting water get into your home. 

Sellers’ Disclosure

Under California law, sellers must provide comprehensive and complete disclosures to buyers in writing. The document has to have all and any information about the condition of the house. These facts are commonly referred to as “material” facts, and in cases where there is a dispute, they serve as crucial evidence in proving wrongdoing.

Material facts provide information about the house's walls, ceilings, insulation, windows, foundations, and electrical systems. The material facts list may not have all the parts of the house but has most. In California, material facts are disclosed in a form known as a "Transfer Disclosure Statement." You have a TDS to make sure that the condition of the house is well-documented before the sale. If you go through the Transfer Disclosure Statement and discover that the defect you have is not listed, then you have a legal case for redress.

Proving the seller hid the information can be grounds for a legal case under California law. You, however, have to show that the seller intended to conceal the defect from you during the sale. Talk to your friends, neighbors and real estate agent to get any facts you may need to help your case.If you can prove your claims in court, your legal awards include the following:

1. Compensatory Damages: The judge can force the seller to pay compensatory damages to you. These may cover any costs you have incurred in fixing the damage after discovering it.

2. Punitive damages: If you can show to the court that the seller deliberately misled you by hiding the damages, the court will award you punitive charges, sometimes alongside the compensatory damages to teach other sellers a lesson not to commit similar fraudulent acts of deception

3. Rescission: In some cases where you feel extremely slighted, or the issue is beyond what you can fix or cope with, the California court can break the contract and give you your money back and revert ownership of the house to the seller.

If you discover that a seller may have hidden vital information from you, you can seek redress in court, through the home warranty company, the homeowner's association, or write the seller directly.