When It Rains It Pours – Rain And The Detection Of Hidden Defects

October 25, 2021 | Category: BPE Newsletter, Real Estate Law, Transfer Disclosure Statement

When It Rains It Pours – Rain And The Detection Of Hidden Defects

By: Robert J. Enos, Esq.

October 24, 2021

With this weekend’s heavy rain after a prolonged period of drought, many property owners will encounter rainwater penetration into their homes for the very first time. Under California law sellers of residential property of one to four dwelling units are required to disclose to potential buyers, in writing, any “material” facts, that may affect the potential buyer’s desire to purchase the property, or the price the buyer is willing to pay. The most common facts not disclosed during a sales transaction concern roofs, windows, grading and drainage can be revealed with the conditions before us now. While not an exhaustive list, these areas in particular can cause the most resultant property damage, high remediation costs and thus trigger a large percentage of failure to disclose cases. Water intrusion can have many effects on a home. These include: damage to wood furniture, household appliances, plumbing equipment, electronic equipment, and upholstery. It can also result in a risk of mold growth and in rare cases health issues stemming from mold and contamination.

In California, with months or years of dry weather punctuated with drenching winter storms, water intrusion defects, which might otherwise go unnoticed, can become very apparent. That is why sellers and their agents must accurately disclose material facts by completing a “Transfer Disclosure Statement,” (TDS). After heavy rains, if you observe leaks around windows, ceiling stains, or surface water pooling, check your TDS to see if the seller disclosed a prior same or similar defect now troubling you.

Just because a TDS does not have a particular disclosure does not necessarily mean the seller or agent failed to disclose. Under Civil Code §1102.4, “Neither the seller nor any seller’s agent or buyer’s agent shall be liable for any error, inaccuracy, or omission of any information delivered pursuant to this article if the error, inaccuracy, or omission was not within the personal knowledge of the seller or that listing or buyer’s agent, was based on information timely provided by public agencies or by other persons providing information as specified in subdivision (c) that is required to be disclosed pursuant to this article, and ordinary care was exercised in obtaining and transmitting it.” Each disclosure required by law shall be made in good faith. For purposes of this article, “good faith” means honesty in fact in the conduct of the transaction.

If at the time the disclosures are required to be made, an item of information required to be disclosed is unknown or not available to the seller, and the seller or his or her agent has made a reasonable effort to ascertain it, the seller may use an approximation of the information, provided the approximation is clearly identified as such, is reasonable, is based on the best information reasonably available to the seller or his or her agent, and is not used for the purpose of circumventing or evading disclosure requirements.

When it comes to water, when in doubt, disclose. Taking such a stance is not just good practice it’s the ethical thing to do and disclosure is required by law. In addition, the delivery of a report or opinion prepared by a licensed engineer, land surveyor, geologist, structural pest control operator, contractor, a C-39 roofing contractor conducting a roof inspection pursuant to subdivision (d) of Section 7197 of the Business and Professions Code, or other expert, dealing with matters within the scope of the professional’s license or expertise, shall be sufficient compliance to a seller’s disclosure requirements.

If you are the buyer and have a water issue, do not hesitate to tender a claim to your homeowner’s insurance policy. The types of water damage covered through insurance typically include sudden or accidental discharge. Gradual damage may also be included, but it must not have been a problem that was deliberately neglected. If the insurance carrier does not cover the damage, they might be able to explain why you might have been the victim of an unscrupulous seller.

For over 20 years the attorneys at BPE Law have been assisting individuals affected by non-disclosure issues arising after the sale of a home. If you believe you have been affected by a non-disclosure issue or if someone is asserting a claim against you, make sure you seek competent legal counsel to assist.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.

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