Sacramento Real Estate Attorney
Real estate transactions or subsequent disputes often require the services of a skilled real estate attorney. Whether you are the buyer, seller, tenant, landlord, agent, or broker, a Sacramento real estate lawyer can help you assert your legal rights in litigation or protect your interests in a real estate transaction. If you need to contact a local real estate attorney call Sacramento Law Group at (916) 596-1018.
Buyer: If you are the buyer in a real estate transaction a real estate lawyer will evaluate the sale to identify problems and implement solutions. According to a 2005 survey by the American Land Title Association, title problems were found in 36 percent of all residential real estate transactions. By involving a real estate attorney these title defects may be identified and appropriate action taken, such as obtaining releases for liens or fixing recording errors.
Real estate attorneys can assist both buyers or sellers in real estate transactions by reviewing or preparing the purchase agreement and closing documents; reviewing the abstract of title, title insurance, and performing a title search to ensure clear title; representing their client at closing; reviewing mortgage documents and supervising transfer of title; record real property deeds; addressing transaction issues and proposing remedies.
Seller: If you are the seller in a real estate transaction you need to protect yourself from future liability while ensuring that the sale proceeds smoothly. A real estate lawyer can help you by negotiating and drafting the purchase and sale agreement, negotiating contingencies of the sale, and representing you at closing.
Sacramento Real Estate Law
Many defrauded buyers and defendant sellers turn to Sacramento real estate lawyers when disputes arise after a sale. Buyers often claim fraud in that the seller or agent failed to disclose a material fact as required by law. Sellers likewise must defend themselves against these nondisclosure claims. Whether you are the buyer or a seller requiring real estate litigation services, contact Sacramento Law Group at (916) 596-1018 to be connected with a real estate litigation attorney.
Sacramento Real Estate Fraud & Nondisclosure
Real estate fraud occurs not only when a seller makes a false statement to a buyer, but also when the seller, broker, or agent fails to disclose a material fact. In practice, many cases involving real estate fraud involve the failure to make the required disclosures.
California Civil Code Section 1102-1102.17 titled “Disclosures Upon Transfer of Residential Property” require sellers to provide buyers with a written transfer disclosure statement in the form required by the statute. The form identifies many specific conditions that must be disclosed, but its general effect is to mandate the disclosure of material conditions (things that have a considerable effect on market value).
Specific conditions that must be disclosed by the seller include identifying fixtures, appliances, improvements, and property features; disclosing any defects in improvements; and disclosing additions, alterations, or repairs made in violation of building codes or without permits. Other conditions which must be disclosed by the seller include the existence of fill on the property, soil problems such as settling, drainage problems and flooding, and any significant damage to the property from fire, earthquake, flood, or landslide.
“As Is” Does Not Relieve The Seller of Liability
Some sellers and agents think that by including an “as is” clause the seller is relieved from liability for not disclosing a material condition unknown to the buyer. In reality, an “as is” clause only means that the buyer is taking the property in the condition that is observable to him; it does not mean that the seller can fail to disclose a material fact unknown to the buyer. Some sellers of distressed properties think that by including an “as is” clause and discounting the price, the buyer has economically assumed the risk in the purchase, thereby relieving the seller of the duty to disclose material facts. This common belief among sellers is simply wrong. Even the seller of a distressed property who includes an “as is” clause in the sale contract must disclose material facts unknown to the buyer or face liability for nondisclosure.
Damages for Real Estate Fraud
Real estate fraud can be committed by the seller, broker, or agent. When the buyer has been defrauded he has two general options for damages after a successful action for real estate fraud: (1) seek damages or rescission of the contract or (2) use the seller’s fraud as a defense for not going through with the obligations under the sales contract.
Civil Code Section 3343 is designed to make the defrauded buyer whole by restoring to the buyer what he lost due to the fraud. To satisfy that policy Section 3343 allows a defrauded buyer to recover the difference between the fair market value of the subject property and the price paid by the buyer. For instance, if the buyer paid $100,000 for real estate that was only worth $70,000 due to the seller’s fraud, the buyer would be able to recover the $30,000 difference in value.
Apart from the general difference-in-value damages, victims of real estate fraud are also entitled to various damages designed to make them whole again. For instance, victims of real estate fraud are entitled to recovery of amounts expended in reliance upon the fraud; recovery of amounts to compensate for loss of use or enjoyment of the property due to the fraud; and where the buyer has been induced to sell the property as a result of the fraud, the recovery of lost profits or other gains which would have been received had the buyer retained the property.
To receive assistance in contacting a qualified real estate lawyer contact Sacramento Law Group at (916) 596-1018.
Proving Real Estate Fraud
No matter what form of damages the buyer will seek, 5 basic elements as articulated in South Tahoe Gas Co. v. Hofmann Land Improvement Co. must be shown by the buyer:
(1) a false representation or concealment of a material fact (or, in some cases, an opinion) susceptible of knowledge, (2) made with knowledge of its falsity or without sufficient knowledge on the subject to warrant a representation, (3) with the intent to induce the person to whom it is made to act upon it; and such person must (4) act in reliance upon the representation (5) to his damage.
Duress in Sacramento Real Estate Transactions
In mob movies the gangster may force a business owner to sign over their store for pennies on the dollar. When this happens, California real estate law considers the victimized business owner to be under duress, and where the buyer or seller in a real estate transaction is under duress or undue influence, California law allows the victimized party to rescind the transaction. In the case of the gangster who gave the business owner “an offer he couldn’t refuse,” the business owner could later rescind (cancel) the real estate contract on the grounds of duress if he can show that his consent was obtained through duress or undue influence by the other party (the gangster) or by third parties whose wrongful acts placed the innocent party in a position the other party (still our gangster) had knowledge of. For instance, say the gangster’s henchmen were destroying everything in our business owner’s store while the gangster held the real estate sales contract out to our victimized business owner. Since the gangster had knowledge of the innocent business owner’s situation created by the wrongful acts of his henchmen, the business owner could rescind the real estate contract due to duress created by the wrongful acts of the third parties.
What Is Duress Or Undue Influence In A Real Estate Transaction?
There is no one all encompassing definition of duress or undue influence. Duress may be found where one threatens physical harm (sell me your house for $100 or I’ll beat you up) or property (sell me your condo or I’ll burn it down). Whether there is undue influence in the sale of real estate sufficient to warrant rescission of the contract is a question of fact and is determined on a case by case basis. Factors affecting to determination of undue influence include the adequacy of consideration (was the purchase price really low), the existence of a confidential relationship between the parties (parties with a confidential relationship are more susceptible to undue influence), and whether the transaction was at arm’s length (if it wasn’t at arm’s length one party may have been unduly influenced). As the determination of duress or undue influence requires accounting for several factors and occurs on a case-by-case basis, seek the advice of a real estate attorney to learn whether you can rescind your real estate contract due to duress or undue influence.
Dual Agency Is Dangerous For Sacramento Real Estate Brokers
All real estate brokers understand that they have fiduciary obligations to their principal. Real estate brokers and agents know that they owe their buyer or seller principal the highest degree of loyalty and good faith. This duty requires real estate brokers and agents to be honest and truthful with their seller or buyer, and give full disclosure of all material facts that could influence their principal’s decision to move forward with the sale. These obligations in essence require the real estate broker or agent to operate only in their principal’s interest, a duty recognized by the agent featured on http://santarosarealestate.info but largely overlooked by the real estate community as a whole. However, real estate transactions involve a buyer and seller who necessarily have divergent interests. Both parties want the benefit of the bargain; the seller wants to make the most money while the buyer wants to pay the least amount of money. In this inherent divergence of interests the existence of dual agency becomes a legal minefield, giving rise to litigation and the employment of real estate attorneys. While dual agency is permitted in California, its existence can complicate a real estate transaction and enhance the liability of the real estate broker or agent.
The Undisclosed Dual Agent
Dual agency may arise not only by express agreement, but also by implication. As reiterated in Wright v. Lowe (1956) “An implied agency may arise from the words and conduct of the parties and the circumstances of the particular case.” Consequently, when a real estate agent for the seller assumes duties or responsibilities for the buyer to facilitate a sale, dual agency may arise. In Wright v. Lowe an agent for the seller transmitted the seller’s offer to a buyer. The buyer in turn formulated a counteroffer in which a low down payment would be achieved by certain deductions from the purchase price for assessments and loans. However, the counteroffer was not transmitted directly from the buyer to seller, but was rather transmitted through the seller’s agent, who upon transmitting the buyer’s counteroffer to the seller became a dual agent. An agent in this unexpected dual agency must give full disclosure to the buyer and seller and obtain the consent to the dual agency from both principals. If the agent fails to obtain this consent and make full disclosure they have become an undisclosed dual agent. Upon becoming an undisclosed dual agent, either principal may avoid their obligations under the real estate contact by rescinding the contract. The right to rescind the contract where an undisclosed dual agent exists is not predicated upon a showing of fraud or injury. The mere existence of the undisclosed dual agent gives rise to the right of rescission and leaves the undisclosed agent liable for damages suffered by the parties.
Specific Performance in Sacramento Real Estate Transactions
A seller fails to perform their obligations under a real estate sales contract or option agreement, and the buyer must decide whether they want to force the seller to comply with their contractual obligations through the remedy of specific performance. To pursue specific performance and force the seller to convey the property, the buyer will have to remain ready to fulfill their obligations under the real estate sales or option contract. Furthermore, the buyer will have to prove the statutory requirements spelled out in Civil Code Section 3384-3395. Those requirements have been articulated in Henderson v. Fisher as…
The plaintiff must show that his remedy at law is inadequate; the contract must be just and reasonable and must be supported by adequate consideration; there must be a mutuality of remedies, that is, the contract must be subject to specific performance by both of the contracting parties; the terms of the contract must be sufficiently definite for the court to know what to enforce; and the performance which the court is asked to compel must be substantially identical to that promised in the contract.
Adequate Consideration, Just & Reasonable
What is adequate consideration? Adequate consideration is not exact fair market value, but rather what is fair, just, and reasonable at the time the contract was entered into. Adequate consideration is determined by the surrounding circumstances, and where the sellers consent has been obtained by misrepresentation, the resulting consideration may be found to be inadequate under the circumstances.
Inadequate Legal Remedy
This element is by far the easiest for a buyer to satisfy. In real estate cases involving the acquisition of a single family dwelling the buyer intends to occupy, a conclusive presumption exists that the breach cannot be adequately compensated by monetary damages. In so many words, in the typical real estate sales agreement involving a single family dwelling which the buyer intends to occupy, the seller’s breach of the real estate sales agreement will be enough to satisfy the “inadequate legal remedy” requirement for specific performance.