By Attorney Christopher Brainard – California Real Estate and Litigation Attorney
When you buy a home in California, you expect to get what you pay for—not a leaking roof, crumbling foundation, or hidden mold problem. But what happens if the seller knew about these issues and failed to disclose them? Are they strictly liable for the damage?
The short answer is: Not exactly. But under California law, a seller’s failure to disclose known material defects can still expose them to significant civil liability—and in many cases, buyers can sue and recover substantial damages.
Let’s break down how California law handles failure-to-disclose cases and whether sellers are strictly liable when they conceal serious defects.
🧾 What Is a “Material Defect”?
A material defect is any issue that:
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Affects the value, habitability, or desirability of the property, and
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Would likely influence a reasonable buyer’s decision to purchase or affect the price they’d be willing to pay
Common examples include:
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Water intrusion or roof leaks
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Foundation cracks or structural instability
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Termite damage
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Plumbing or electrical system failures
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Environmental hazards (mold, asbestos, radon)
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Prior illegal renovations or unpermitted additions
California law requires sellers to disclose these defects if they are known to the seller.
⚖️ What the Law Says About Disclosure
California Civil Code § 1102 et seq.
This section of the law requires sellers of residential property (1–4 units) to complete and deliver a Transfer Disclosure Statement (TDS). The TDS must disclose all known material facts that affect the property.
Failure to disclose a material defect—whether intentional or negligent—can form the basis for a lawsuit under:
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Fraud or concealment
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Negligent misrepresentation
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Breach of contract
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Failure to comply with statutory duties
❗ Are Sellers Strictly Liable for Failing to Disclose?
No, not in the strict legal sense.
Strict liability usually applies in product liability or ultrahazardous activity cases—where liability attaches without proof of fault or intent.
In real estate, sellers are not strictly liable for defects they didn’t know about. However, they can be held liable if:
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They knew about the defect and failed to disclose it (intentional concealment or fraud)
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They should have known through reasonable observation or investigation (negligence)
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They made misleading or incomplete disclosures
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They made false statements on the TDS or in other written materials
📌 Bottom line:
Liability hinges on the seller’s knowledge and duty to disclose—not automatic strict liability.
🧠 What About “As-Is” Sales?
Many sellers try to disclaim responsibility with an “as-is” clause. However, California courts have ruled that:
“As-is” does not protect a seller who actively conceals or fails to disclose known material defects.
(South Tahoe Gas Co. v. Hofmann Land Improvement Co. (1972) 25 Cal.App.3d 750)
An “as-is” sale may relieve a seller from making repairs, but it does not excuse nondisclosure of known problems.
🧑⚖️ What Buyers Can Do If a Seller Fails to Disclose
If you purchased a home and later discovered serious defects the seller failed to disclose, you may be entitled to:
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Rescission of the sale (in rare cases)
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Monetary damages for repair costs and diminished value
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Attorney’s fees in certain contract-based claims
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Punitive damages in fraud cases
You may also be able to pursue the seller’s real estate agent or broker if they participated in or failed to prevent the nondisclosure.
⏳ Statute of Limitations
Buyers typically have:
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3 years from the discovery of the defect (for fraud claims)
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2–4 years depending on the claim type (contract vs. tort)
Early consultation with a real estate attorney is critical. Delay may limit your recovery options.
🤝 Protect Your Rights with LawBrainard
At LawBrainard, we help California buyers hold sellers accountable when they’ve been misled, deceived, or harmed by nondisclosure. If your dream home came with hidden damage, we can help you recover what’s fair—and help make sure it doesn’t happen to someone else.
📞 Call/Text (310) 266-4115
🌐 Visit: www.LawBrainard.com
🗓 Schedule a consultation to explore your legal options today.
Christopher Brainard is a California real estate and litigation attorney representing homebuyers, investors, and property owners in disclosure disputes, fraud claims, and residential real estate litigation.
*This article/blog is provided for informational and educational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship between you and Christopher Brainard, Esq. An attorney-client relationship can only be formed through a written and signed agreement with Christopher Brainard. If you need legal advice about your specific situation contact us for a consultation. [Christopher Brainard, 651 N. Sepulveda Blvd., #2010, Bel Air, CA 90049. Tel: (310) 266 - 4115. Email: christopherbrainard@gmail.com].