Last updated: October 2026
Do three things before anything else: photograph and document the defect exactly as you found it, get a written professional assessment of the cause and cost, and check the date. In California you generally have three years from discovering a fraudulent nondisclosure to bring a claim, and four years on a written contract. Then read the dispute resolution clause in your purchase agreement, because most California residential contracts require mediation before you can file. Bay Legal, P.C. represents California buyers in nondisclosure claims against sellers and agents.
Definition: An undisclosed defect is a material condition affecting a property’s value or desirability that the seller or their agent knew about and failed to disclose before the sale closed.
What should you do first?
- Document the defect before touching it. Photographs and video, dated, showing the condition as discovered and its extent. Once repairs begin the evidence is gone, and a defect described from memory is worth far less than one photographed.
- Get a written professional assessment. A licensed inspector, engineer, or contractor stating what the defect is, what caused it, how long it has likely been present, and what repair will cost. The age question matters more than the cost question — a condition that plainly predates the sale is difficult for a seller to claim ignorance of.
- Check the deadline. Before doing anything else. A strong claim brought late is worth nothing, and the periods are shorter than most buyers assume.
- Gather the transaction file. The Transfer Disclosure Statement, the purchase agreement, all inspection reports, the listing, any repair invoices from the seller, and every email or text in which the property’s condition was discussed. Nondisclosure cases are usually decided on documents.
- Read the dispute resolution clause. Most California residential purchase agreements require mediation before filing, and filing without it can affect your right to recover attorney fees even if you win.
- Do not confront the seller informally first. An early conversation gives them notice and time, and anything you say can be used later. A written demand prepared with advice does the same job and preserves your position.
Repairs that cannot wait — an active leak, a safety hazard — should proceed, but document thoroughly first and keep every invoice.
How long do you have?
| Claim | Period | Runs from | Authority |
|---|---|---|---|
| Fraud or intentional concealment | 3 years | Discovery of the facts | Code Civ. Proc. § 338(d) |
| Breach of the purchase agreement | 4 years | The breach | Code Civ. Proc. § 337 |
| Negligence or negligent misrepresentation | 2 to 3 years | Depends on the claim | Code Civ. Proc. §§ 335.1, 338 |
| Claim against a real estate agent | 2 years | Discovery, subject to statute | Code Civ. Proc. § 2079.4 |
Full text: § 337 · § 338 · § 2079.4.
The claim against the agent is the one buyers most often lose to time. The statutory period for actions arising from an agent’s inspection duty is shorter than the fraud period against a seller, which means a buyer who spends a year negotiating with the seller can find the agent claim gone while the seller claim survives.
Who can be held responsible?
The seller, on what they knew. Under Civil Code section 1102 and following, a seller of residential property of one to four units must complete a Transfer Disclosure Statement identifying known material defects. The obligation covers actual knowledge and cannot be waived by the parties.
The listing agent, on what a proper inspection should have found. Civil Code section 2079 requires a reasonably competent and diligent visual inspection of accessible areas and disclosure of what it reveals. This is a separate claim on a separate basis, and it survives even where the seller genuinely did not know.
Your own agent may also be liable where they failed in their duty to you, and a home inspector may be liable in contract or negligence — though inspection contracts frequently contain limitation clauses capping liability at the fee paid.
An as-is sale does not defeat these claims. As-is means the seller will not repair; it does not licence concealment of a known material defect.
What can you recover?
More than the repair cost, in the right case.
- Damages measured by the out-of-pocket loss. For fraud in a property transaction, Civil Code section 3343 measures damages as the difference between what you paid and the property’s actual value, plus additional damages proximately caused. Repair cost is often the practical proxy, but where the defect permanently reduces value the diminution measure can be considerably larger.
- Rescission. Unwinding the sale entirely, available under Civil Code section 1689 where consent was obtained by fraud, undue influence, or material misrepresentation. Demanding in practice and rarely realistic years after closing, but worth considering early where the defect goes to the fundamental character of the property.
- Punitive damages. Available under Civil Code section 3294 on clear and convincing evidence of oppression, fraud, or malice. A materially higher bar than proving the nondisclosure itself, so these are pleaded where the evidence supports them rather than reflexively.
- Specific performance. An order compelling the seller to perform their obligations, available under Civil Code section 3384 where damages are inadequate.
- Attorney fees. Only where the contract provides. The C.A.R. Residential Purchase Agreement contains a fee-shifting provision, which frequently matters more to how the dispute proceeds than the size of the claim.
Do you have to mediate before filing?
Usually. The C.A.R. Residential Purchase Agreement, used in most California residential transactions, requires the parties to mediate before pursuing court or arbitration. The consequence of skipping it is specific and expensive: a party who files without first attempting mediation can lose the right to recover attorney fees even if they go on to win.
Mediation is also frequently the better route on its merits. Nondisclosure disputes turn on documents and expert evidence, both sides face real costs, and a seller facing a well-documented claim with a professional assessment attached has a strong incentive to resolve it before the fees mount.
Where mediation fails, the claim proceeds to arbitration or to the Superior Court of the county where the property is located, depending on what the agreement provides. The California Courts publish local rules, which differ by county. Complaints about agent or broker conduct can separately be made to the Department of Real Estate, which is a regulatory route rather than a compensation one.
Who handles nondisclosure claims at Bay Legal?
Lead litigation attorney Evan Livingstone heads the firm’s litigation group, including real estate disputes. Robert Brian Ponziano handles real estate transactions and civil litigation and holds a California real estate licence alongside his law licence, which is useful where an agent’s conduct is in issue. Clarence Olson practises in real estate law.
Bay Legal, P.C. serves clients statewide from offices in Palo Alto and Los Angeles, including across San Francisco and the wider Bay Area.
Frequently Asked Questions
What should I do first after finding an undisclosed defect?
Photograph and document it before any repair work begins, then get a written professional assessment of the cause, age, and repair cost. Check the limitation period. Gather the Transfer Disclosure Statement, purchase agreement, and inspection reports. Read the dispute resolution clause, since most California purchase agreements require mediation before filing.
How long do I have to sue the seller?
Generally three years from discovering the facts for fraud or intentional concealment under Code of Civil Procedure section 338(d), and four years for breach of the written purchase agreement under section 337. Claims against a real estate agent are subject to a shorter period, which is the deadline buyers most often lose.
Can I sue if I bought the property as-is?
Usually yes. An as-is clause means the seller will not repair defects; it does not permit concealing known material defects. The statutory disclosure obligation under Civil Code section 1102 cannot be waived, and courts treat as-is clauses used to shield deliberate nondisclosure accordingly.
Can I claim against the agent as well as the seller?
Often, and on a different basis. The seller is liable for what they knew and failed to disclose. The listing agent has an independent duty under Civil Code section 2079 to conduct a reasonably competent visual inspection and disclose what it reveals — so an agent claim can succeed even where the seller genuinely did not know.
How much can I recover?
For fraud, Civil Code section 3343 measures damages as the difference between what you paid and the property’s actual value, plus losses proximately caused. Rescission, punitive damages, and specific performance may also be available depending on the facts. Attorney fees are recoverable only if the contract provides for them.
Should I fix the problem before or after making a claim?
Document thoroughly first — photographs, video, and a written professional assessment — because once repairs begin the evidence is gone. Urgent repairs affecting safety or causing ongoing damage should proceed, with every invoice kept. Non-urgent work is better delayed until the defect has been properly recorded.
Related Questions
What counts as a material defect?
Anything affecting the value or desirability of the property to a reasonable buyer. Structural movement, roof failure, water intrusion, mould, pest damage, unpermitted work, and boundary problems all commonly qualify.
Does the seller have to disclose a death on the property?
Any death on the premises within the previous three years must generally be disclosed, subject to statutory qualifications about the nature of the death.
What if the work was done without permits?
Unpermitted work is a material fact requiring disclosure. It affects value, insurability, and your ability to sell later, and it is one of the more common subjects of these claims.
Can I still claim if my inspector missed it?
Often yes. Your inspector’s failure does not excuse the seller’s nondisclosure, though the seller may argue you should have discovered it — which is one reason the defect’s visibility and location matter to the analysis.
Talk to a California nondisclosure attorney
The fraud period runs from discovery, the agent claim runs shorter, and your purchase agreement probably requires mediation before you can file. To discuss an undisclosed defect with a Bay Legal attorney, call the office nearest you or email intake.
Bay Legal, P.C. — serving California statewide
Northern California office
667 Lytton Ave Ste 3, Palo Alto, CA 94301
(650) 668-8000
Southern California office
3211 Cahuenga Blvd W Ste 212, Los Angeles, CA 90068
(213) 668-8000
Intake: intake@baylegal.com
Fax: (650) 963-0041
Website: https://baylegal.com
This page is general information about California law and does not constitute legal advice or create an attorney-client relationship. For advice on your specific situation, contact a licensed California attorney.