Tag: Real Estate Fraud Attorney Los Angeles; Los Angeles Real Estate Fraud Lawyer; Nondisclosure Attorney Los Angeles; Los Angeles Nondisclosure Attorney

Generally, in a nondisclosure/fraud claim arising out of a real estate sale and transaction, wherein the buyer is bringing claims against both the seller and broker, we analyze the Transfer Disclosure Statement (“TDS”) to determine whether a breach of statutory duty claim should also be brought. If it is found that the TDS was not accurate or failed to disclose known material facts, we would consider bringing a breach of statutory duty against both the Seller and Seller’s Broker and California law supports such a claim.

Section 1102.4(a) seems to suggest that a listing agent shall be liable for any omission that was (a) within its personal knowledge, (b) was based on information timely provided by public agencies or by a person providing information as specified in this section and (c) required to be disclosed. See Cal. Civ. Code § 1102.4(a). Furthermore, Section 1102.9 states that an agent can amend the TDS if information becomes known. Moreover, in Loken v. Century 21 – Award Properties, (1995) 36 Cal. App. 4th 263, 274, the Court of Appeal held that a claim against a broker under Cal. Civ. Code § 1102 et seq for breach of statutory duty, is subject to a two year statute of limitations. Thus, such a claim against a broker is authorized under California law.

If you are a buyer of real estate and believe certain material facts were not disclosed during escrow, contact one of our Los Angeles Real Estate Attorneys today for a free consultation and case evaluation.

Cal. Civ. Code § 1102 et. seq. codified the required disclosures found in the Transfer Disclosure Statement (“TDS”) that is executed as part of residential real estate purchases. The TDS contains several specific disclosures regarding the property that must be made. The list of disclosures may not cover every component of the property or every material fact affecting the value or the desirability of the property. Thus, if there is a material fact affecting the value or desirability of the property not already covered by the TDS, the seller of real estate must still disclose what is not covered by the TDS. See Cal. Civ. Code § 1102.8 (“The specification of items for disclosure in this article does not limit or abridge any obligation for disclosure created by any other provision of law or which may exist in order to avoid fraud, misrepresentation, or deceit in the transfer transaction.”) Sellers are obligated under California law to disclose all material facts within their knowledge affecting the value or desirability of the property even if the material fact is not specifically covered by the form disclosures executed in typical residential real estate transactions.

If you have a real estate nondisclosure question, contact one of our Los Angeles Nondisclosure Attorneys today for a free consultation and case evaluation.

At least one case in California suggests that a deceptive answer to a disclosure related inquiry made by a buyer may constitute fraud. See Brady v. Carman, (1960) 179 Cal. App. 2d 63, 68 (“A representation need not be a direct falsehood to constitute fraud. It may be a deceptive answer or other indirect but misleading language.”) In Brady, Plaintiff buyers sued Defendant listing agent representing the developer seller, for concealment of material facts regarding the terms of an easement. See Brady supra 179 Cal. App. 2d at 65-66. During escrow, Plaintiffs were aware that an easement existed but unaware of the nature of the easement. Id. at 68. When Plaintiff inquired with Defendant, the Brady Court held that “[t]he defendant’s answers were evasive, and misleading, and were such as to discourage further investigation by the purchasers.” Id. In holding that the Defendant agent breached his duty to disclose, the Brady Court stated:

It was not sufficient for the defendant to simply tell the plaintiffs that they ‘had nothing to worry about’ and ‘[i]t is these water pipes that you find on the curb of the street.’ ‘That is all it is.’ The inquiry having been made, and the defendant having undertaken to answer, he was obliged as a professional man to obtain information about the easement and make a full disclosure of the burdens it imposed on the land.

Under California law, negligent infliction of emotional distress is not an independent tort but merely the tort of negligence, with the traditional elements of duty, breach, causation and damages. See Burgess v. Superior Court (1992) 2 Cal.4th 1064, 1072.) A cause of action for negligent infliction of emotional distress lies only where plaintiff suffers serious emotional distress “as a result of a breach of duty owed the plaintiff that is assumed by the defendant or imposed on the defendant as a matter of law, or that arises out of a relationship between the two.” Id. at p. 1073.) That relationship must be a preexisting, consensual relationship giving rise to a legally protectable interest in being free from emotional distress caused by another’s negligent conduct. See Bro v. Glaser (1994) 22 Cal.App.4th 1398, 1441.) Furthermore, California law recognizes two theories of recover for negligent infliction of emotional distress, the “bystander” theory and the “direct victim” theory. See Burgess supra 2 Cal. 4th at 1071.

To establish a bystander claim, the plaintiff must be (1) closely related to the injury victim; (2) present at the scene of the injury-producing event at the time it occurs and is then aware that it is causing injury to the victim; and (3) as a result suffers emotional distress beyond that which would be anticipated in a disinterested witness. See Thing v. La Chusa (1989), 48 Cal.3d 644, 647.

Under the “direct victim” theory of recovery, Plaintiff must allege that Defendant Kejejian, owed him a duty, breached said duty and the breach of duty by Defendant Kejejian legally caused Plaintiff’s damages. See Ess v. Eskaton Properties, Inc. (2002) 97 Cal. App. 4th 120, 126. Moreover, California law is well settled in that there is no duty to avoid negligenty causing emotional distress to another. See Potter v. Firestone Tire & Rubber Co., (1993) 6 Cal. 4th 965, 984. Therefore, as a matter of law, “unless the defendant has assumed a duty to plaintiff in which the emotional condition of the plaintiff is an object, recovery is available only if the emotional distress arises out of the defendant’s breach of some other legal duty and the emotional distress is proximately caused by that breach of duty.” Id. at 985.

If you have questions or concerns regarding your civil litigation lawsuit, contact our civil litigators today.

Our Real Estate Attorneys in Los Angeles were recently presented with an issue wherein a broker we represent inquired about the claim for a commission on a “pocket listing” wherein there was no written listing agreement. Under California law, any agreement employing a broker to act in a real estate transaction is subject to the Statute of Frauds. Specifically California Civil Code § 1624(a)(4) reads:

An agreement authorizing or employing an agent, broker, or any other person to purchase or sell real estate, or to lease real estate for a longer period than one year, or to procure, introduce, or find a purchaser or seller of real estate or a lessee or lessor of real estate where the lease is for a longer period than one year, for compensation or a commission.

Thus, the prudent real estate broker should have all of his/her listing agreements in writing signed by the seller, even their “pocket listings.” The law requiring a writing is there to protect property owners against compensation claims from brokers or persons not authorized to act in their real estate transaction (see Rader Co. v. Stone, (1986) 178 Cal. App. 3d 10, 21); and to protect brokers, who after performing brokerage services, are compensated in good faith. (see Seck v. Foulks, (1972) 25 Cal. App. 3d 556, 575.)

Even though outside the realm of a real estate transaction, equitable estoppel or unjust enrichment claims may be used by a party to overcome the writing requirement of the statute of frauds, the Supreme Court of California has held that such theories of recovery (i.e., unjust enrichment, quantum meruit) are not available to licensed real estate brokers in actions to recover a commission pursuant to an oral agreement or “pocket listing.” (See Phillippe v. Shapell Industries, (1987) 43 Cal. 3d 1247, 1260.)

California law requires that all real estate licensees adhere to the statute of frauds requirements in Cal. Civ. Code § 1624(a)(4) and brokers and agents are presumed to know the law once they’ve passed the licensing requirements and obtained licenses.

“As-Is” Real Estate Sales – Sellers and Seller’s Agent are always under a duty to disclose concealed or known material facts that are not known or observable by the buyer.  A property sold “As-Is” means that the buyer is buying the property in the condition that is visible or observable to the buyer. Therefore, when the Seller or the Seller’s agent fails to disclose all material facts regarding the condition of the property that are unknown to the buyer, the “As Is” provision will not relieve the Seller or Seller’s Agent fraud liability arising from the nondisclosure.  The California Supreme Court has made it clear that a seller cannot contract his/her way out of a fraudulent transaction. Herzog v. Capital Co. (1945) 27 Cal. 2d 349.