California Real Estate Disclosure Counter-Arguments
California Civil Code sections 1102-1102.17 require sellers to disclose all known material facts about a property. When sellers or agents fail to disclose, buyers may recover damages including repair costs, diminished value, and in cases of fraud, rescission of the entire transaction. This page helps you respond to common defenses raised by sellers and their agents.
Under California law, sellers must disclose all known material facts that affect the value or desirability of the property. A "material fact" is anything that would influence a reasonable buyer's decision. Sellers cannot hide behind ignorance if they should have known about a condition, and they cannot rely on "as-is" clauses to escape liability for non-disclosure.
California law looks at whether the seller knew or should have known about the defect. Evidence such as prior repairs, insurance claims, permits, complaints to HOA, or the obvious nature of the condition can establish constructive knowledge. Additionally, sellers have a duty to reasonably investigate their property's condition.
Civil Code § 1102.6 - Requires disclosure of facts "known to the seller."
Civil Code § 1710(3) - Suppression of a fact by one bound to disclose it is fraud, including constructive knowledge.
Lingsch v. Savage (1963) - Seller has duty to disclose facts "likely known" to them based on ownership.
"The evidence demonstrates that you either knew or should have known about this defect. [Specific evidence: permit for prior repair / insurance claim in 2019 / HOA violation notice / neighbor statement that you complained about this issue]. Under California Civil Code § 1710(3), suppression of a material fact by one who should know of it constitutes actionable fraud. Your claimed ignorance does not relieve you of liability."
An "as-is" clause does NOT eliminate disclosure obligations under California law. The TDS requirements are statutory and cannot be waived by contract. As-is clauses may shift risk for unknown defects, but they do not protect sellers who actively conceal or fail to disclose known defects.
Civil Code § 1102.1 - TDS disclosure requirements are mandatory and cannot be waived.
Civil Code § 1668 - Contracts exempting parties from fraud or willful misconduct are void.
Loughrin v. Superior Court (1993) - "As-is" clauses do not protect against fraud or intentional non-disclosure.
"While the contract contained an as-is clause, California Civil Code section 1102.1 explicitly provides that disclosure requirements cannot be waived by agreement. Furthermore, Civil Code section 1668 voids any contract provision that would exempt a party from liability for fraud or willful misconduct. Your failure to disclose [specific defect] that you knew about constitutes fraud, and the as-is clause provides no defense."
A buyer's inspection does not relieve the seller of their independent disclosure duty. Inspections are limited in scope - inspectors cannot see behind walls, under flooring, or detect hidden defects. If the seller knew of a defect that wasn't reasonably discoverable by inspection, they still had a duty to disclose it.
Civil Code § 1102.4 - Buyer's inspection does not eliminate seller's disclosure duty.
Assilzadeh v. California Federal Bank (2000) - Seller's duty to disclose is independent of buyer's duty to inspect.
Civil Code § 2079.3 - Buyer's right to inspect does not diminish seller's disclosure obligations.
"My home inspection did not and could not discover this defect because [it was concealed behind drywall / covered by flooring / hidden by cosmetic repairs / not visible without destructive testing]. Under Civil Code section 1102.4, my inspection does not relieve you of your duty to disclose known defects. You knew about this condition and failed to disclose it, regardless of whether my inspector could have discovered it."
California imposes an affirmative duty to disclose material facts - sellers cannot wait to be asked. The TDS is a minimum, not a maximum. Sellers must volunteer information about known material defects whether or not the buyer specifically asks about them.
Civil Code § 1102.6 - Seller must disclose "all" known material facts affecting the property.
Civil Code § 1710(3) - Suppression of a fact one is bound to disclose is fraud.
Shapiro v. Sutherland (1998) - Sellers have affirmative duty to disclose; cannot rely on buyer's failure to ask.
"California law imposes an affirmative disclosure duty on sellers. Under Civil Code section 1102.6, you were required to disclose all known material facts - not merely answer questions honestly. The fact that I did not specifically ask about [defect] does not excuse your failure to volunteer this material information. Shapiro v. Sutherland explicitly holds that sellers cannot rely on a buyer's failure to ask."
Conditions like foundation issues, water intrusion patterns, mold growth, and structural damage typically develop over years, not months. Expert analysis can often determine when a problem began. Evidence such as old water stains under fresh paint, long-standing termite damage, or age of mold growth can establish the condition pre-dated the sale.
Evidence Code § 801 - Expert testimony admissible on matters beyond common experience.
Civil Code § 1102.6 - Disclosure required for conditions existing at time of sale.
"Expert analysis demonstrates that this condition predates the sale. [The mold testing shows growth patterns consistent with years of moisture exposure / the structural engineer found damage that developed over multiple years / photos reveal water staining under recent paint / permit records show prior repairs to this area]. This condition existed during your ownership and you were obligated to disclose it."
The discovery rule applies to disclosure claims - the limitations period begins when you discover (or should have discovered) the defect, not from the date of purchase. For fraud claims, you have 3 years from discovery. For concealment, the period may be tolled until discovery.
CCP § 338(d) - Fraud claims: 3 years from discovery.
CCP § 337 - Written contract claims: 4 years.
April Enterprises v. KTTV (1983) - Discovery rule tolls limitations where injury could not reasonably be discovered.
"The discovery rule applies to real estate disclosure claims. I did not discover this defect until [date], when [how discovered]. Under CCP section 338(d), the limitations period for fraud does not begin until the fraud is discovered. Since I discovered this condition less than [3 years] ago, my claim is timely. The fact that I purchased the property [X] years ago is irrelevant under the discovery rule."
The seller personally signs the TDS and is personally responsible for its accuracy. Using an agent does not transfer the seller's disclosure duty. While the agent may share liability for their own failures, the seller remains primarily liable for their own false or incomplete disclosures.
Civil Code § 1102.6 - Seller must complete and sign the TDS personally.
Civil Code § 2079.16 - Agent duties are independent of, not substitutes for, seller duties.
Civil Code § 2332 - Principal (seller) liable for acts within agent's scope.
"You personally signed the Transfer Disclosure Statement, certifying its accuracy under penalty of perjury. Under Civil Code section 1102.6, this is your personal obligation that cannot be delegated to an agent. While your agent may have independent liability for their conduct, your use of an agent does not transfer or eliminate your disclosure duties. You remain liable for the false statements and omissions on the TDS you signed."
California law requires agents to conduct a "reasonably competent and diligent visual inspection" of the property. Agents must disclose material facts they observe or should observe. They cannot blindly accept the seller's representations if a competent inspection would have revealed issues.
Civil Code § 2079 - Agent must conduct reasonably competent visual inspection.
Civil Code § 2079.5 - Agent must disclose material facts discovered.
B&P Code § 10176(i) - Agent cannot fail to disclose material facts known to agent.
"Under Civil Code section 2079, you had a legal duty to conduct a reasonably competent visual inspection of the property. A competent inspection would have revealed [visible water stains / cracks in foundation / signs of pest damage / other visible indicators]. Your failure to observe and disclose these conditions, or to inquire further about obvious red flags, constitutes a breach of your statutory inspection duty and professional negligence."
A fact is "material" if it would affect a reasonable buyer's decision or the price they would pay. Courts interpret this broadly. Even "minor" issues become material when they require significant repair costs, affect habitability, indicate larger problems, or would have influenced negotiation.
Civil Code § 1102 - Material facts are those affecting value or desirability.
Reed v. King (1983) - Materiality determined by effect on reasonable buyer's decision.
Shapiro v. Sutherland (1998) - Facts need not be physical defects to be material.
"This issue is material under California law. The defect requires repairs costing approximately $[amount], which would have significantly affected my negotiation of the purchase price. Under Reed v. King, a fact is material if it would affect a reasonable buyer's decision. Had I known about [defect], I would have either negotiated a lower price or declined to purchase. This clearly meets the materiality standard."
A home warranty does not substitute for disclosure obligations. Warranties typically exclude pre-existing conditions, have significant limitations, and don't cover many types of defects (structural, environmental, water intrusion). Providing a warranty does not excuse failure to disclose known material defects.
Civil Code § 1102 - Disclosure duty is independent of warranty coverage.
Home Warranty Terms - Most exclude pre-existing, known conditions.
"The home warranty you provided does not cover this defect because [it excludes pre-existing conditions / it excludes structural issues / the claim was denied]. More importantly, providing a warranty does not satisfy your disclosure obligations under Civil Code section 1102. Your duty to disclose known material defects is independent of any warranty coverage. You cannot use a warranty as a substitute for honest disclosure."
Damages for non-disclosure include: (1) the cost to repair the defect, (2) the difference between what was paid and actual value, (3) consequential damages like temporary housing, and (4) in fraud cases, rescission of the entire transaction. The "benefit of the bargain" measure ensures buyers get what they paid for.
Civil Code § 3343 - Out-of-pocket damages for fraud including repair costs.
Civil Code § 1689 - Rescission available for fraudulent transactions.
Stout v. Turney (1978) - Buyer entitled to difference between price paid and actual value.
"My damages are well-documented and include: repair costs of $[amount] as shown by contractor estimates, consequential damages of $[amount] for [temporary housing / lost rental income / storage costs], and diminished property value of approximately $[amount]. Under Civil Code section 3343, I am entitled to recover these out-of-pocket losses caused by your fraudulent non-disclosure."
While many purchase contracts contain mediation/arbitration clauses, these may not apply to fraud claims or may not have been properly executed. Review the specific clause carefully. Even if arbitration applies, you can still pursue your claims through that forum. Fraud claims sometimes fall outside standard contract dispute provisions.
Civil Code § 1281.2 - Court determines arbitrability of claims.
CCP § 1281.2(c) - Fraud in the inducement may void arbitration clause.
CAR Form RPA - Standard form requires initials for mediation/arbitration.
"While I acknowledge the mediation/arbitration provision in our purchase contract, I am prepared to pursue my claims through that forum if required. However, [the arbitration clause was not properly initialed / my fraud claims may not be covered by the clause / I am initiating mediation as required]. This procedural requirement does not affect the merits of my disclosure claims, and I intend to pursue all available remedies."
Licenses and regulates real estate agents. File complaints about agent misconduct.
Phone: (877) 373-4542
Professional association offering mediation services and standard forms.
Complex disclosure disputes often require legal representation.
State Bar Referral: (866) 442-2529
For claims up to $12,500. No attorney required. Filing fee typically $30-$75.
Generate a professional demand letter, CA court complaint, or arbitration demand