Based on my research, assuming you have proof that you disclosed to
the buyer that the loft/storage area was unpermitted prior to the sale
on the appropriate form, you do not have any liability unless you
agreed to correct the problem. Of course, you should not rely upon my
research as a substitute for professional legal advice. A letter from
your attorney to the buyer may expedite getting this matter cleared
"Most of these mandatory disclosures simply require that the sellers
reveal what they already know. Both the buyer?s and seller?s agent
must conduct a reasonably competent and diligent visual inspection of
the accessible areas of the property and disclose what they find.
The seller does not have to conduct any expert investigations for the
buyer?s benefit. However, if the seller has hired an expert they need
to give a copy of the expert?s report the buyer. Also, the seller is
not obliged to repair or correct any problems or defects, except by
mutual agreement with the buyer."
"Real Estate Disclosures and Expert Reports" by Chet Boddy, Mendocino
Coast Real Estate Magazine (2002)
"Selling your condo? What problems do you have to tell the buyer
about? What does your realtor have to disclose? How about the buyers'
A recent Appellate Court decision sheds light upon California's
complicated real estate disclosure law. In Pagano v. Krohn, 97 Daily
Journal D.A.R. 15195, November 17, 1997, the Paganos purchased a condo
from Ms. Krohn. The Court, in effect, said that Ms. Krohn, her real
estate agent and the Paganos' agent disclosed all they needed to under
The facts were undisputed. The condominium association (Blackhorse
Homeowners Association) had filed a lawsuit alleging construction
deficiencies against the Developer. The condo in question had no
problems that anyone knew of prior to the sale.
In addition, the Court noted the following facts:
1. Ms. Krohn told them that a lawsuit existed;
2. A consultant that the buyers' hired told them that downspouts and
gutters were recommended to help with drainage;
3. The seller's agent told them that the lawsuit involved water
intrusion problems; and
4. The buyer's agent gave them a letter from the Board of Director's
explaining that the lawsuit had been filed against the Developer to
toll the statute of limitations, and the Association was hoping to
work out a settlement regarding downspouts and gutters with the
When they moved in, the Buyers had water intruding into their unit.
They sued the seller, her agent and their agent on various theories
relating to failure to disclose water intrusion problems.
The Appellate Court said that the seller and both agents disclosed all
relevant information. The seller had experienced no water intrusion
before selling her unit. None was apparent through a visual inspection
and there was no reason to believe that the unit would suffer from
The buyer had enough information to make an informed decision whether
or not to purchase the condominium. They had enough facts to decide
whether to conduct further investigation about potential water
The moral of this story is: Don't blame anyone but yourself if you are
on notice of a potential problem and in the face of it, go ahead with
the purchase. The Court will not help you."
"You Better Tell Them: California Real Estate Disclosure Law" By
Thomas E. Miller, FindLaw (1999)
"Early Disclosure of Property Conditions Is Required
The transferor of any real property subject to the statute is required
to deliver (in person or by mail) to a prospective transferee a
written disclosure of the condition of the property as soon as
practicable before transfer of title. In the case of transfer by a
sales contract, or by a lease together with an option to purchase, the
disclosure must be delivered as soon as practicable before execution
of the contract, i.e., before the making or acceptance of an offer.
The written disclosure must be in the form specified in the statute
(see below). The transferor must state -- on the receipt for deposit,
in the real property sales contract (or lease), or in a separate
document -- that she or he has complied with the statute.
What Must Be Disclosed?
The statute includes a disclosure form ("Real Estate Transfer
Disclosure Statement") in section 1102.6. Disclosures made pursuant to
the statute must be on a copy of this form. The form covers such
Items on the property (appliances, water heater, burglar alarm, hot tub, etc.).
Operating condition of certain items.
Defects in walls, ceilings, floors, sidewalks, etc.
Existence of environmental hazards, easements, construction without
permit, zoning violations, flooding problems, earthquake damage, deed
restrictions, and neighborhood noise problems or other nuisances. (For
a court case dealing with the duty to disclose noise, see Shapiro v.
Sutherland, 2nd District Court of Appeal, 1998, 64 Cal.App.4th 1534.)"
"Real Estate Transfer Disclosures in California" (October 28, 2004)
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