You bought a home in California and discovered a problem the seller knew about and did not tell you — water intrusion, a failing foundation, unpermitted work, a history of repairs that were papered over before listing. California law imposes real disclosure duties on sellers and their agents, and it gives buyers remedies when those duties are breached.
ROMO Law Group represents buyers and sellers in residential and commercial nondisclosure and real estate fraud disputes throughout California. Below is a plain-language explanation of the law that governs these claims, the deadlines that apply, and what recovery actually looks like.
What California sellers are required to disclose
California’s disclosure regime sits on two independent foundations. The first is statutory. The second is the older common law duty to disclose known material facts. A seller can comply with the paperwork and still be liable under the common law — and a seller who was exempt from the paperwork can still be liable for concealment.
The Transfer Disclosure Statement
Civil Code section 1102 and the sections that follow require a seller of single-family residential property to deliver a completed Real Estate Transfer Disclosure Statement, commonly called the TDS. Under the Real Estate Law definitions the statute incorporates, that scope covers property improved with one to four dwelling units, along with condominium units, units in a planned development, and units in a residential stock cooperative.
Three features of the statute matter most in litigation:
- The disclosure duty cannot be waived. Civil Code section 1102(c) states that any waiver of the article’s requirements is void as against public policy. An “as is” clause does not get a seller out of the TDS.
- Negligence is enough. Civil Code section 1102.13 makes any person who willfully or negligently violates the article liable for the buyer’s actual damages. A buyer does not have to prove the seller intended to defraud anyone to recover under this section.
- Late disclosure triggers a termination right. Under section 1102.3, if a required disclosure — or a material amendment to one — arrives after the buyer’s offer has been executed, the buyer has three days after personal delivery, or five days after delivery by mail or electronic record, to terminate in writing. A material amendment restarts that window.
Note what section 1102.13 does not do. It expressly provides that no transfer is invalidated solely because someone failed to comply. The statute is a damages remedy, not an automatic unwind of the sale.
The natural hazard disclosure
Civil Code section 1103 and the sections that follow require a separate Natural Hazard Disclosure Statement covering six statutory zones: FEMA special flood hazard areas, areas of potential flooding from dam inundation, very high fire hazard severity zones, Alquist-Priolo earthquake fault zones, seismic hazard zones for liquefaction and landslide, and state responsibility area wildland fire zones. Section 1103.13 mirrors section 1102.13 — willful or negligent violation, actual damages, no invalidation of the transfer — and section 1103(d) likewise makes waiver void.
Fire zone accuracy, defensible space compliance, and insurability have become a significant source of California disclosure disputes. Where a property’s hazard designation affects whether it can be insured at all, the harm is concrete and measurable.
New disclosure obligations taking effect in 2024 and 2026
The Legislature has added several disclosure requirements that are still working their way into practice. These are frequently missed — by sellers, and by lawyers relying on older checklists.
| Requirement | Authority | Effective |
|---|---|---|
| Flipper disclosure. A seller reselling single-family residential property within 18 months of acquiring it must disclose room additions, structural modifications, alterations and repairs made since acquisition, along with contractor and permit information. | Civ. Code § 1102.6h (AB 968) | July 1, 2024 |
| Electrical system notice. A statutory notice advising the buyer to have the electrical system inspected by a qualified professional, flagging substandard or recalled wiring, fire and insurance risk, and capacity limits for electrification and EV charging. Buildings sold within three years of a certificate of occupancy are exempt. | Civ. Code § 1102.6i (SB 382) | Jan. 1, 2026 |
| Gas appliance replacement restrictions. The seller must disclose in writing any known state or local requirement or restriction affecting future replacement of gas-powered appliances transferring with the property. | Civ. Code § 1102.6j (SB 382) | Jan. 1, 2026 |
| Smoking and nicotine residue. Disclosure of a known history of smoking or vaping on the property and of tobacco or nicotine residue. | Civ. Code § 1102.6k (AB 455) | Jan. 1, 2026 |
The Seller Property Questionnaire and similar C.A.R. forms are contract documents, not Civil Code requirements. A false answer on one of those forms is a breach of contract and potentially fraud — but it is not a section 1102.13 claim. The distinction matters, because the contract claim is usually the one that carries an attorney fee clause.
Death on the property
Civil Code section 1710.2 provides that there is no duty to disclose an occupant’s death, or the manner of death, where the death occurred more than three years before the buyer’s offer. The statute separately provides that there is no duty to disclose that an occupant was living with HIV or died from AIDS-related complications — a permanent exclusion, not subject to the three-year period.
The exception is what generates litigation. Section 1710.2 expressly does not immunize an intentional misrepresentation made in response to a direct inquiry. Silence about an old death is lawful. Lying about it when asked is not, no matter how long ago it happened.
What the buyer’s agent and the listing agent owed you
Civil Code section 2079 imposes on a licensed broker or salesperson a duty to conduct a reasonably competent and diligent visual inspection of residential property of one to four units, and to disclose to a prospective buyer all facts materially affecting the value or desirability of the property that such an investigation would reveal. The duty was recognized at common law in Easton v. Strassburger (1984) 152 Cal.App.3d 90, where listing agents who saw evidence of prior earth movement — netting from earlier slide repairs, an uneven guest house floor, signs of fill — neither investigated nor warned the buyer.
The Legislature codified Easton and, at the same time, limited it. Two provisions define the boundaries of any agent claim:
- Section 2079.3 excludes areas that are reasonably and normally inaccessible, and does not require an agent to inspect off-site areas, public records, or permits. This is why “the agent should have pulled the permits” usually fails as a theory — though an agent who actually knew about unpermitted work still had to disclose it.
- Section 2079.4 sets a hard outer limit: no action for breach of the article’s duties may be commenced more than two years from the date of possession, meaning the date of recordation, close of escrow, or occupancy, whichever occurs first.
That two-year cap is the deadline that most often destroys an otherwise viable claim against an agent, and it can start running before escrow closes if the buyer took occupancy early. Later decisions have kept the duty meaningful in other respects: in Ryan v. Real Estate of the Pacific, Inc. (2019) 32 Cal.App.5th 637, a broker who learned from a neighbor about planned adjacent construction had to disclose it, even though the fact was off-site and therefore outside the visual inspection.
The claims a buyer actually brings
A nondisclosure case is rarely a single cause of action. The usual combination:
Intentional misrepresentation
A material fact represented as true, known to be false, made to induce reliance, justifiably relied upon, causing damage. In residential cases the “representation” is typically a checked box or a written answer on the TDS or the seller questionnaire.
Negligent misrepresentation
Civil Code section 1710(2) defines deceit to include the assertion of a fact by someone with no reasonable ground for believing it true. No intent to deceive is required, which is why “I thought the leak had been fixed” does not end the case. Because this theory requires a positive assertion, pure silence is pleaded as concealment instead.
Concealment and fraudulent nondisclosure
Civil Code section 1710(3) reaches the suppression of a fact by someone bound to disclose it, or who gives other information likely to mislead for want of communicating that fact. A duty to disclose arises where the defendant had exclusive knowledge of a material fact, actively concealed it, or made partial representations while suppressing qualifying facts. Partial disclosure is a recurring pattern: “roof repaired 2019” is a representation, and omitting that it leaked twice afterward is a suppression.
Breach of contract
The purchase agreement incorporates the disclosures. False answers breach the seller’s representations. This is often the fee-bearing claim — and the reason the mediation requirement discussed below matters so much.
The common law claim against the seller
California’s pattern jury instruction for a real estate seller’s nondisclosure requires the buyer to prove the seller knew the fact, failed to disclose it, that the buyer did not know and could not reasonably have discovered it, that the seller knew that, that the fact significantly affected the value or desirability of the property, and that the nondisclosure was a substantial factor in causing harm. Importantly, the statutory scheme does not displace this common law duty — which is the basis for pursuing a probate, trustee, or REO seller who was exempt from the TDS but knew about the defect anyway.
One limit worth stating honestly: a seller is liable for failing to disclose facts the seller actually knew. California does not impose a duty on sellers to investigate their own property before listing it (RSB Vineyards, LLC v. Orsi (2017) 15 Cal.App.5th 1089). Proving knowledge — through prior repair invoices, insurance claims, permit history, contractor communications, and prior listing photographs — is usually the center of gravity in these cases.
Deadlines
| Claim | Authority | Period |
|---|---|---|
| Fraud, concealment, mistake | CCP § 338(d) | 3 years from discovery of the facts |
| Breach of written contract | CCP § 337 | 4 years from breach |
| Negligence / injury to real property | CCP § 338(b) | 3 years |
| Breach of an agent’s statutory inspection duty | Civ. Code § 2079.4 | 2 years from the earliest of recordation, close of escrow, or occupancy |
The discovery rule does not wait until a buyer knows for certain. Accrual begins when the buyer suspects, or reasonably should suspect, that an injury was caused by wrongdoing. In Vera v. REL-BC, LLC (2021) 66 Cal.App.5th 57, pre-closing inspection reports that contradicted the sellers’ disclosures put the buyer on inquiry notice before escrow even closed — and the court applied the three-year fraud period to the buyer’s contract claim as well, because the gravamen of the case was fraud. The suit, filed three years and three days after closing, was time-barred.
What recovery looks like
Being candid about the measure of damages is more useful than promising a number.
- Fraud damages against a seller are governed by Civil Code section 3343, which uses the out-of-pocket rule: the difference between the actual value of what the buyer parted with and the actual value of what the buyer received, plus amounts reasonably expended in reliance, loss of use and enjoyment, and related items. Section 3343(b) expressly forecloses benefit-of-the-bargain damages against a seller. Repair estimates are commonly used as evidence of diminished value, but the legal measure is the value differential, not the repair invoice.
- Statutory disclosure violations under sections 1102.13 and 1103.13 yield actual damages. There is no fee-shifting and no punitive damages in those sections.
- Punitive damages are available under Civil Code section 3294 only on a non-contract claim, only on clear and convincing evidence, and only for oppression, fraud, or malice. The statutory definition of fraud there — intentional concealment of a material fact known to the defendant — maps closely onto deliberate seller concealment. Negligent nondisclosure will not support punitive damages.
- Rescission is available in principle under Civil Code section 1689, and section 1692 permits consequential damages alongside it without duplicate recovery. In practice, unwinding a closed residential sale is difficult, and most matters resolve as damages claims.
The C.A.R. Residential Purchase Agreement conditions its prevailing-party attorney fee clause on first attempting mediation. In Lange v. Schilling (2008) 163 Cal.App.4th 1412, a plaintiff who filed suit without requesting mediation forfeited attorney fees entirely despite prevailing; the court rejected substantial compliance and treated the requirement as an unambiguous condition precedent. A written mediation request sent before filing is often the single cheapest thing a buyer can do to protect the economics of the case.
Disputes we handle
Water intrusion and mold
Roof, window, and envelope leaks; undisclosed prior water damage; remediation costs and loss of use. The most common category, and often seasonal — problems surface with the first heavy rain after purchase.
Foundation and soil movement
Settlement, expansive soils, slope failure, retaining wall movement, and cosmetic repairs used to mask a history of structural distress.
Unpermitted work
Additions, conversions, and remodels done without permits or final inspection — now squarely covered for recent flips by Civil Code section 1102.6h.
Concealed prior repairs
Undisclosed insurance claims, self-performed repairs, and partial disclosures that omit the qualifying facts.
Neighbor and off-site conditions
Boundary and easement problems, planned adjacent construction, view loss, and nuisance conditions an agent learned about and did not pass along.
Fire zone and insurability
Hazard zone designation, defensible space compliance, and the growing category of claims where a property proves difficult or impossible to insure.
How we work these cases
Nondisclosure cases are won on documents. The first phase of a matter is almost always evidentiary: pulling the permit history and building department file, obtaining prior listing photographs and MLS remarks, tracing insurance claim history, subpoenaing contractor and remediation records, and comparing what the seller wrote on the disclosure forms against what the seller was told and paid for before listing.
Because ROMO Law Group is a boutique firm, the attorney evaluating your file is the attorney who will handle it. Initial consultations are free, and the first conversation is usually about two things: what the documents are likely to show, and which deadline is closest.
Frequently asked questions
Can a seller avoid liability by selling a house “as is” in California?
No. An “as is” clause allocates the cost of defects the buyer knows about or could reasonably discover. It does not permit a seller to conceal a known material defect, and it does not waive the Transfer Disclosure Statement. Civil Code section 1102(c) provides that any waiver of the disclosure requirements is void as against public policy.
What if the property was sold through a probate, trust, or foreclosure and I never got a disclosure statement?
Civil Code section 1102.2 exempts a number of transfers — including court-ordered sales, foreclosure and REO sales, and many fiduciary transfers — from the statutory Transfer Disclosure Statement. Those exemptions do not eliminate the separate common law duty to disclose known material facts. A seller who actually knew about a defect and hid it can still be liable even though no TDS was required.
How long do I have to sue a seller for failing to disclose a defect?
Fraud and concealment claims are generally governed by Code of Civil Procedure section 338(d), which allows three years from discovery of the facts constituting the fraud. California courts apply an inquiry-notice standard, so the clock can begin when a buyer should have suspected a problem — sometimes before escrow even closes. Claims against a real estate agent under Civil Code section 2079 et seq. are capped at two years by section 2079.4. Deadlines are fact-specific; a lawyer should evaluate yours.
Can I recover my attorney's fees?
Possibly, but only if a contract or statute provides for it. The statutory disclosure sections provide actual damages only, with no fee-shifting. The C.A.R. Residential Purchase Agreement contains a prevailing-party fee clause — but it is conditioned on first attempting mediation. A party who files suit without requesting mediation can forfeit fees entirely, even after winning.
Do I have to sue to undo the sale, or can I just recover money?
Both are theoretically available, but rescission of a closed residential sale is difficult in practice because the buyer generally has to be able to restore the property. Most cases proceed as damages claims. Under Civil Code section 3343, fraud damages against a seller are measured by out-of-pocket loss — the difference in actual value — plus related expenses, rather than the benefit of the bargain.