January 23rd, 2023 at 3:06 pm
Multiple Choice Question: Is the seller legally required to provide a buyer with the repair estimate? Pick the best answer:
A. Yes.
B. Yes, for one-to-four residential unit transactions only.
C. No.
D. Unclear.
Answer: The best answer is D. A seller is legally required to disclose any known material facts affecting the value or desirability of the property. That is true regardless of whether the seller is selling one-to-four residential units (as in Answer B) or something else.
However, what is not altogether clear is whether this particular repair estimate is a “material fact” that must be disclosed as a matter of law, or whether it is just the opinion of one contractor or handyman concerning some minor issues, and does not need to be disclosed. If a seller or buyer needs a definitive answer, he or she would have to bring the matter before a judge, jury, or arbitrator to make that decision, based on these exact circumstances.
Of course, most sellers would not want to go through the time and expense of litigating or arbitrating about the disclosure of a repair estimate. Hence, our general advice in our day-to-day practice is “when in doubt, disclose.”
As a practice tip, you can provide the seller with C.A.R.’s Disclosure Information Advisory (DIA), and go over the information together. The DIA explains why a seller should disclose things. The DIA specifically addresses repair estimates in paragraph 2E.
Additionally, a seller may be contractually obligated to provide a buyer with a Seller Property Questionnaire (SPQ). In that situation, you can point out to the seller that, under paragraph 5 of the SPQ, the seller must disclose any known estimates, and give a copy to the buyer.
-Thank You to Jennifer Sobetzer (La Mesa / El Cajon Office) for suggesting this week’s legal tip!
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