HOW TO AVOID BEING SUED FOR NON-DISCLOSURE BY A HOME BUYER

In addition to these damages that arise from the repair or construction necessary to remedy the defect, the buyer will also demand payment of all their attorney fees incurred in resolving the defect claim. The Standard California Real Estate form provides for the reimbursement of any attorney fees and costs incurred as a result of any claimed non-disclosure on behalf of the seller.

Thus, the question for any seller becomes ... "how do I protect myself from these types of claims by a buyer?" Initially, and most obvious, is the advice that sellers disclose truthfully and accurately the conditions, whether they be negative or positive, of the home. However, even if the seller and its agent are truthful, this will not eliminate a lawsuit being brought by the buyer.

There is, however, a little used or known method of further insulating and in fact immunizing a seller from liability for non-disclosure, imagined or otherwise. More to the point, California Civil Code §1102.4 provides an immunity for sellers or transferors of a residential property who transfer the property with no personal knowledge of any known error, inaccuracy or omission as it relates to the disclosure of defects to a potential buyer. That is based upon the requirement that the seller or transferor retains the services of a licensed engineer, land surveyor, geologist, structural pest control operator, contractor or other expert including home inspectors that prepare and deliver to buyer and seller a report of those findings following an inspection or investigation as to any potential defects that may exist at the property.

In plain English, that means if you as a seller insure that during the escrow process a home inspection is done by a licensed home inspector or other licensed contractor or engineer, any defect that was not found or disclosed during escrow cannot be used as a method or means to assert liability and obtain monetary relief from you as a seller from your buyer.

Thus, if a buyer makes a decision not to have a home inspection performed, you as a seller may choose, and I would suggest you do so, to pay for the inspection yourself and provide a copy of that report to the buyer. This would then insulate and protect you and in fact provide immunity for you for any lawsuit brought by the buyer at some time in the future for non-disclosure of a known or even unknown defect. When considering the fact that a home inspection costs generally anywhere from $300 - $500, this equates to only one or two hours of attorney’s time defending a lawsuit brought by a buyer against you.

An attorney could charge you as a seller anywhere from $10,000 - $50,000 to defend such a case. Clearly, spending a minute percentage of that amount at the outset during the sale could save you literally thousands of dollars in the future. One could safely assume that if this type of immunity is provided, it would act as a buffer and deterrence to a greedy plaintiff’s attorney who represents the buyer in these types of lawsuits. Remember, you as a seller are not covered by insurance policies for these types of claims. If you are interested in other means and methods of protecting yourself during and after the sale of your home, please do not hesitate in contacting the Evers Law Group.