Must a commercial property REALTOR disclose that the property is in foreclosure?

Asked over 1 year ago - San Diego, CA

I just signed a 2-year lease with a commercial broker and the property foreclosed 1 week into my tenancy. There were a couple of "red flags" but when I asked the broker if the property was in foreclosure, her response was, "a majority partner will be taking over the property." When I asked, is the property in escrow, her reply was "no." I've lost my deposit and my 1-month rent paid in advance. Do I have recourse? Was it material information? I also have to move out of the space and I've spend ~$2,000 in tenant improvements.

Attorney answers (3)

  1. Frances Miller Campbell

    Pro

    Contributor Level 15

    5

    Lawyers agree

    1

    Answered . The fact that the landlord was losing possession and could not perform under the commercial lease is definitely a material fact that should have been disclosed by the realtor. I would say she is on the hook for your damages. You might want to report this to the Department of Real Estate.

    Important things to remember: 1. The fact that I answered a question that you asked me on line, doesn't make me... more
  2. Paul J Molinaro

    Pro

    Contributor Level 17

    2

    Lawyers agree

    Answered . Real estate brokers and their agents have duties of disclosure which basically require telling their client's anything that a reasonable person would consider "material" (i.e. so important that the decision to purchase or walk away would change if such information were to be known). Furthermore, real estate agents and brokers also have a duty to truthfully answer questions asked by their clients - hiding the ball by intentionally providing ambiguous answers may be considered fraud. A local real estate attorney should be able to advise on whether disclosure duties have been violated.

    - Paul

    Paul J. Molinaro, M.D., J.D.
    Attorney at Law, Physician, Broker
    Fransen&Molinaro;, LLP
    980 Montecito Drive, Suite 206
    Corona, CA 92879
    (951)520-9684
    www.fransenandmolinaro.com / www.888MDJDLAW.com
    "When you need a Lawyer, call the Doctor"

    ** This post and all others I make on Internet are for informational purposes only. None of the information or materials I post are legal advice. Nothing I post as comments, answers, or other communications should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship. While I try to be accurate, I do not guarantee accuracy.

    Paul J. Molinaro, M.D., J.D. Attorney at Law, Physician, Broker Fransen&Molinaro;... more
  3. Michael Ryan Juarez

    Contributor Level 16

    Answered . I agree with the above attorneys. The department of real estate has a consumer help line here in San Diego. it is (619) 525-4192. Good Luck.

    -Michael R. Juarez Law Office of Juarez and Schaeffer PO Box 16216 San Diego, CA 92105 (619) 804-4327 www.jslaw.... more

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