by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
randolphp@umkc.edu

VENDOR/PURCHASER; MISREPRESENTATION; DISCLOSURE DUTIES; NONCONFORMING USE: Although, under California statutes and common law, seller has duty to disclose that property is located in flood plain, seller does not have the duty to further disclose that as a consequence of this location the improvements on the proeprty constitute a nonconforming use that an owner could not rebuild in the event of damage or destruction. Sweatt v. Hollister, 43 Cal. Rptr. 2d 399 (Cal. App. 1995)

Despite the broad disclosure duties imposed on homeowners under California law, the legal consequences of physical conditions are still readily determinable by buyer's inquiry, and the court concludes that buyer should make that inquiry.

Note that the distinction is not exactly the traditional one between "latent" and "patent" defects. One would assume that the location of the property within a flood plain is also a fact that could be ascertained by the buyer by checking publicly available records. Further, it may well be that these records are at least as available as those dealing with special zoning restrictions on rebuilding. Still, the court concludes that specific disclosure of the flood plain is required, even though the legal consequenences of such need not be disclosed.

Comment: The editor is hardly an expert on the meaning of California Civil Code Sections 1102 et seq. But a brief reading of Section 1102.6 would suggest that the statute imposes a specific obligation upon the seller to disclose the existence of nonconforming uses. The statute sets forth a required disclosure form that includes the following:

"C. Are you (Seller) aware of any of the following: . . .

. . . 0. Any zoning violations, nonconforming
uses, violations of "setback" requirements

( )yes ( )no"

"THE UNDERSIGNED, BASED ON THE ABOVE INQUIRY OF THE SELLER(S) AS TO THE CONDITION OF THE PROPERTY AND BASED ON A REASONABLY COMPETENT AND DILIGENT VISUAL INSPECTION OF THE ACCESSIBLE AREAS OF THE PROPERTY IN CONJUNCTION WITH THAT INQUIRY, STATES THE FOLLOWING:

( ) Agent notes no items for disclosure.

( ) Agent notes the following items for disclosure."

The court, ruling on summary judgment, does not indicate specifically whether the buyer charged that the seller or broker had actual knowledge of the nonconforming use condition, but does indicate that the causes of action included actions in "deceit" and "suppression of fact," and since the buyer's claim is apparently based upon the statute, one must assume that the buyer was prepared to show that the seller and broker knew of the nonconforming use condition.

If there was actual knowledge of a nonconforming use, and the statutory form requires the disclosure of a nonconforming use in those terms, how can the court conclude that disclosure of the existence of the flood plain satisfies the statutory requirement?

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. Contact Shawn Kaminsky at the ABA. (312) 988 5260.

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.