California Real Estate Disputes Hub

California law requires sellers to disclose all material facts affecting property value or desirability. This includes: (1) Transfer Disclosure Statement (TDS) covering structural issues, mechanical systems, environmental hazards, neighborhood nuisances, and legal restrictions (CC 1102+); (2) Natural Hazard Disclosure (NHD) for flood zones, fire zones, earthquake faults, and seismic hazards (CC 1103); (3) Death on property within past 3 years, if by violent means (CC 1710.2); (4) Homeowners association restrictions and fees; (5) Mello-Roos and special assessment districts; (6) Any known material defects even if not specifically asked on TDS form. The seller's duty extends to defects they know about OR should know about through reasonable diligence. If you discover a seller failed to disclose a material defect, you may have claims for fraud (CC 1710.2), negligent misrepresentation, breach of contract, and rescission. You can recover repair costs, diminished property value, and in fraud cases, punitive damages.

It depends on whether you're still within your contingency periods. If you're within the inspection, appraisal, or loan contingency periods specified in your purchase contract, you can typically cancel and get your full deposit back without giving a reason. Standard California Association of Realtors (CAR) contracts give buyers 17 days for inspection contingency, and loan/appraisal contingencies typically extend until a few days before closing. Once you've "removed contingencies" in writing, however, backing out constitutes breach of contract, and the seller may be entitled to keep your deposit as liquidated damages—but only up to 3% of the purchase price for residential 1-4 unit properties where you intend to occupy (CC 1675). If your deposit exceeds 3%, the seller must refund the excess. Example: $1 million purchase with $50,000 deposit → seller can keep maximum $30,000, must refund $20,000. If the seller breaches (backs out to accept higher offer, for instance), you get your full deposit back PLUS you may sue for specific performance to force the sale or sue for damages.

California Civil Code Section 1675 limits liquidated damages in residential real estate contracts to 3% of the purchase price for properties with 1-4 units where the buyer intends to occupy. This means if a buyer breaches the contract after removing contingencies, the seller can only keep up to 3% of the purchase price as damages, even if the deposit was larger. For example, on a $800,000 purchase, maximum liquidated damages = $24,000. If buyer deposited $40,000, seller must refund $16,000. The 3% cap applies ONLY if: (1) it's residential 1-4 units, (2) buyer intends to occupy, (3) the liquidated damages clause was separately initialed by both parties, and (4) clause is in 10-point bold type or larger. If these requirements aren't met, the liquidated damages clause may be unenforceable entirely. Exception (CC 1677): Seller can keep more than 3% if they can prove actual damages exceeded 3%, but this is difficult—seller must prove actual lost profit, not just the difference if property later sells for less.

Yes. California Civil Code Sections 2079-2079.6 impose a statutory duty on both listing agents and buyer's agents to conduct a "reasonably competent and diligent visual inspection" of the property and disclose material facts to prospective buyers. This duty exists even if the seller provided a Transfer Disclosure Statement and even if the contract has an "as-is" clause. Agents cannot simply rely on the seller's representations—they must use their professional expertise to spot red flags like water stains, foundation cracks, mold, unpermitted additions, or other obvious defects. If your agent saw (or should have seen) a material defect during the visual inspection but failed to disclose it, you may sue for: (1) breach of fiduciary duty (if agent represented you), (2) negligence, (3) negligent misrepresentation, and (4) violation of CC 2079. You can also sue the broker (the agent's supervising brokerage) under respondeat superior—brokers are vicariously liable for their agents' acts. Common recoverable damages: cost to repair defect, diminished property value, cost to move if you rescind, and sometimes attorney fees if agent's conduct was egregious.

For construction defect claims, California has two main statutes of limitation: (1) CC 337.1: 4 years from substantial completion for "patent" (visible) defects; (2) CC 337.15: 10 years from substantial completion for "latent" (hidden) defects. "Substantial completion" means when the building is ready for its intended use, typically at final inspection or certificate of occupancy. The discovery rule may extend the 4-year deadline—the statute doesn't start until you discover (or reasonably should have discovered) the defect—but courts apply this narrowly. You're expected to investigate warning signs like cracks, leaks, or settlement. Important: CC 941 imposes an absolute 10-year statute of repose—no lawsuit can be filed more than 10 years after substantial completion, regardless of when you discovered the defect. For new construction (substantially completed after January 1, 2003), you must also comply with SB 800 prelitigation procedures before filing suit, which includes sending the builder written notice and allowing opportunity to inspect and repair. Skipping SB 800 notice will get your lawsuit dismissed.

For fraud claims in real estate transactions, California Code of Civil Procedure Section 338(d) provides a 3-year statute of limitations from the date you discovered (or reasonably should have discovered) the fraud. This is shorter than the 4-year SOL for written contract claims (CCP 337) but includes a discovery rule: the 3 years doesn't start until you knew or should have known about the fraudulent misrepresentation or concealment. For example, if a seller actively concealed a foundation defect and you discovered it 2 years after closing when the floor started sagging, your 3-year fraud SOL begins at discovery (when floor sagged), not at closing. However, you're expected to investigate warning signs—if there were red flags you ignored, courts may say you "should have discovered" the fraud earlier. To prove fraud under CC 1710.2, you must show: (1) defendant made a false representation or concealed a material fact, (2) defendant knew it was false or concealed the fact, (3) defendant intended you to rely on it, (4) you reasonably relied, and (5) you suffered damages. Fraud claims can support punitive damages, unlike simple breach of contract, so the remedy is potentially much larger.

No. "As-is" clauses do NOT excuse sellers from disclosure obligations or protect against fraud claims. California law is clear: an "as-is" clause means the buyer accepts the property in its current condition as observed during inspections and assumes the risk of defects that were discoverable through reasonable inspection. But "as-is" does NOT mean: (1) seller can lie or make fraudulent misrepresentations, (2) seller can actively conceal defects, (3) seller is excused from statutory disclosures (TDS, NHD, etc.), or (4) seller can withhold information about latent (hidden) defects known to seller but not discoverable by buyer. In Lingsch v. Savage (1963) 213 Cal.App.2d 729, the court held that as-is clauses do not waive fraud claims—sellers cannot use boilerplate language to shield themselves from liability for intentional concealment. Similarly, real estate agents cannot use as-is clauses to avoid their CC 2079 visual inspection duty. Bottom line: you can still sue for fraud, negligent misrepresentation, and failure to disclose material defects even with as-is language in the contract.

Yes, through an equitable remedy called "specific performance" under California Civil Code Section 3387. Because every piece of real estate is considered legally "unique," courts readily grant specific performance in real estate contracts—meaning the court will order the breaching seller to complete the sale at the original contract price. This is a powerful remedy available to buyers but rarely available in other types of contracts. Common scenario: seller accepts your offer, you remove all contingencies, then seller gets cold feet or receives a higher offer and tries to back out. You can sue for specific performance to force the sale. Requirements: (1) valid written contract (statute of frauds), (2) buyer performed all conditions or was ready, willing, and able to perform, (3) adequate consideration (purchase price), (4) terms are clear and unambiguous, and (5) remedy at law (money damages) is inadequate. The last element is always satisfied in real estate—courts presume property is unique. Alternative remedy: sue for damages (difference between contract price and current market value if market has risen, plus costs of finding alternative housing, moving expenses, and emotional distress). Specific performance is typically preferred because it gets you the house you wanted, not just money.