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Real Estate Agent listed lied about upgrades and failed to disclose many items in listing. Case for Errors and Omissions?

Encino, CA |

We recently purchased a home and were specifically told that the house was fully upgraded to copper plumbing and and an upgraded electrical panel. This is written in the listing and contract.

These items have not only turned out to be false, but within the 6-month period of ownership need to be replaced and it will cost close to $10,000 for both items. These are not covered by homeowner's insurance as the installation was illegal and faulty.

Is this a court case for the sellers or for the agent who misrepresented the property?

Thank you in advance for all advice.

Attorney Answers 4

Posted

I agree with my colleagues that you have a cause of action against the seller. I also handled a matter a few years back very similar and since the sellers had no money, we also pursued the agent. My clients recovered more than $80,000 from the real estate company (and their carrier did indeed pay). There is a theory in the law that the broker/agent is not required to make disclosures about the existence of things on real property, but when they open their mouth, they must only speak truthfully. Best of luck!

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Asker

Posted

Thank you, Attorney Ozols, for your advice. It is hard to know when an agent is responsible but your term of "when they open their mouth, they must only speak truthfully" is incredibly helpful!!

Posted

Yes, this may be a failure to disclose, but a full review of all the documents involved in the purchase would have to be reviewed to properly advise you. Additionally, even if you have a case, you will probably have to go to arbitration or mediation, rather than filing suit.

I am a real estate broker as well as an attorney.

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Asker

Posted

Thank you, attorney Parikh, for your advise. The statements above aren't necessarily non-disclosure just inaccurate. My understanding it is illegal to inform buyers in writing that a house has been repiped with copper and an upgraded panel when it is not true. I have never been involved in this type of suit and am not sure if this is a case geared toward seller or toward the agent.

Sagar P. Parikh

Sagar P. Parikh

Posted

That would be fraud then. Definitely against the seller but perhaps the agent as well.

Gary Ralph Ilmanen

Gary Ralph Ilmanen

Posted

When in doubt, sue them all and let the judge sort them out?

Dana Leigh Cisneros

Dana Leigh Cisneros

Posted

I would also add that regarding mediation and arbitration, the DRE form is "if demanded" as a precursor to recovery of attorneys' fees. There would not be privity of contract with the listing (seller) agent that would bind the buyer to a mediation or arbitration agreement. When you retain an attorney, you would want to make sure that they solicit a waiver from the other side, and if not, get the ball rolling asap.

Posted

This looks like it probably is a case against the sellers and, if you are able to establish the agent knew or should have know about the false disclosure, a case against the agent. You really should consult with an experienced R.E. lawyer as this is an area of the law where a do-it-yourself approach should not be attempted. There are many great R.E. lawyers here on Avvo and most of them should give you a free consultation. Good Luck.

*Scott G. Nathan has been licensed to practice law in California since 1983. The information presented here is general in nature and is not intended, nor should it be construed as legal advice for any particular case or matter. This posting does not create any attorney-client relationship with Scott G. Nathan or my law firm. For specific advice about your particular situation, you should consult with an attorney immediately.

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Posted

I agree with my colleagues. You should retain a real estate lawyer to advise you.

There is, however, one point that puzzles me: Did you not have the house inspected before the purchase and sale closed?

This information does not constitute legal advice and does not establish an attorney-client relationship.

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Asker

Posted

Thank you, Attorney Shultz, for your advice. I did have the house inspected and, unfortunately in some particular cases, since stealing electricity was involved, it could not be found as it requires a special key from the Department of Power to access. In other cases, the inspector did not find these items however no inspector will inspect until a waiver is signed so they are not legally responsible.

Dana Howard Shultz

Dana Howard Shultz

Posted

Thank you for the follow-up.

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