The Letter of The Law: April 2013

CONSTRUCTION: Seller Beware: Disclosing Construction Defects and Lawsuits in the Sale of a Residence

FAMILY LAW: “Can I Move Away With My Children?”

Seller Beware: Disclosing Construction Defects and Lawsuits in the Sale of a Residence

The old saying “let the buyer beware” is of little relevance to California real estate transactions. If you are contemplating the sale of your home in California and have had construction defects or a prior lawsuit involving defects in your home, you should be aware of the basic disclosure requirements under California law.

Sellers of real property in California have a general duty to disclose all material facts that might adversely affect the value of the property, and which the seller knows are not known by the buyer or within the buyer’s diligent attention and observation. A failure to fulfill that duty is a form of fraud.

With regard to sales involving from one to four residential units, California Civil Code Section 1102.6 goes a step further in mandating disclosure of all “significant defects/malfunctions” in a variety of construction components, including, among others, interior and exterior walls, roofs, windows, concrete slabs and foundations, and plumbing. If you are selling your home, you either have been or will be presented with a “Real Estate Transfer Disclosure Statement” requiring the disclosure of problems with these construction components, and others. Another part of the disclosure form requires disclosure of known lawsuits affecting the property, “including any lawsuits alleging a defect or deficiency” in the property or in the common areas, if the property is part of a condominium or townhome development.

The disclosure statute is silent on whether to disclose only pending lawsuits or all known lawsuits, including those that have been concluded by settlement or otherwise. However, in 2009, the California Court of Appeal strongly suggested, without squarely deciding, that a seller should disclose even prior lawsuits. (See Calemine v. Samuelson (2009) 171 Cal.App. 4th 153.)

In the Calemine case, the seller disclosed a known, prior problem with water intrusion, but did not disclose the fact that two separate lawsuits involving that issue had been filed in court. The buyer promptly sued. The trial court initially found that the seller had adequately disclosed the water intrusion problem. The Court of Appeal, however, disagreed, sending the case back to the trial court to determine whether the seller also should have disclosed the prior lawsuits. Among other things, had the buyers known of the prior lawsuits, they could have obtained the court records and investigated further.

A failure to comply with the disclosure requirements embodied in the Real Estate Transfer Disclosure Statement does not invalidate a sale. However, anyone who willfully or negligently fails to comply is liable for actual damages suffered by the buyer. In addition, compliance with the Civil Code requirements does not relieve a seller of the general, common law duty to disclose anything that might affect the value of the property. The available remedies for a breach of the common law duty include not only damages, but, in an appropriate case, a judgment unwinding the sale.

In the Calemine case, the better course of action for the seller, without question, would have been to disclose the prior lawsuits, even though the underlying problem of water intrusion had been disclosed.

“Can I Move Away With My Children?”

By: Hoang-Anh Zapien

During a divorce, parents are forced to rearrange their lives, and significant changes are often inevitable. Amongst these changes, parents who are divorcing usually make the decision to move because they can no longer afford to live in the same area. They feel the need to live closer to their work or even relocate to an area where they have family that can provide support during this difficult time. Nevertheless, anytime a move is considered and children are involved, the “moving” process becomes much more complicated. When a parent considers moving, the parent must consider whether or not the move is in the best interests of the children, and how the other parent will continue to have frequent and continuing contact with the children.

What does “move away” mean? Any move a parent makes, whether the move is 5 miles or 5000 miles away, that disrupts the current custodial schedule in any way that is detrimental to the relationship of either parent is considered a “move away.” This may warrant a new custodial schedule being implemented or even a change of custody. Either the parent wanting to move or the other parent who is opposed to the move must file a Request for Orders with the Court to get permission to move the child, or to get orders preventing the other parent from moving the child.

When dealing with “move away” orders, the Court’s priority is always to consider what is in the best interest of the children. The Court also considers the current timeshare and how each parent is exercising their time with the children. The Court’s analysis of the situation differs based on whether the parent requesting the move has sole custody, or whether the parties share joint custody of the children.

Sole Custody. If the parent requesting the move has sole custody of the children, that parent has the presumptive right to move. The non-custodial parent has the burden of proving to the Court that the move will be detrimental to the child and/or detrimental to his or her relationship with the child. If the non-custodial parent is able to show that the move will be detrimental to the children, the Court will likely have an evidentiary hearing to reevaluate the current custody schedule to determine if a change in custody is necessary. Otherwise, if no detriment can be shown, the child will likely be allowed to move.

Joint Custody. If the parent requesting the move shares joint custody with the other parent, the Court presumes the move will be detrimental to the children. The Court will then hold an evidentiary hearing to determine what would be in the best interests of the children. The Court will weigh the following factors:

  • Distance of the move;
  • Reason for the move;
  • Children’s ages;
  • The length of time the current custody order has existed;
  • The children’s ties and relationships to the current community in which they are living;
  • The children’s relationships with both parents;
  • Whether or not the moving parent will allow the child to have frequent and continuing contact with the other parent; and
  • What the child wants, if they are old enough to indicate a preference.

In weighing all of these factors, Courts are often faced with the difficult decision of determining whether or not the move would be in the best interest of the child. Upon a determination of what the Court feels is most beneficial to the children, the Court will either allow the requesting parent to move the child, or the Court will make a change in custody orders as is deemed necessary to protect the well-being of the children. The Court does not make a decision as to whether or not the parent can move, but rather whether or not the parent can move the children with him or her to the new location.

Kenneth W. Chung Appointed as Advisory Board Member for the Paralegal Program at IVC

Kring & Chung Managing Partner, Kenneth W. Chung, has been appointed as an advisory board member for the Paralegal Studies program at Irvine Valley College in Irvine, CA. The paralegal program at Irvine Valley College prepares students to assist attorneys as paralegals in administrative agencies, corporations, insurance companies, private law firms, government, and other legal environments. Emphasis is on training students in practical application and development of up-to-date paralegal related job skills. In addition, the program introduces students to legal theory.

Michelle A. Philo Appointed by California State Bar as ABA Delegate

On March 7, 2013, the Board of Trustees of the State Bar of California appointed Kring & Chung attorney, Michelle A. Philo, to serve as a State Bar delegate to the American Bar Association’s (ABA) House of Delegates. The House of Delegates is the policy-making body of the ABA and meets twice a year, at the ABA Mid-Year and ABA Annual Meeting. The State Bar appoints a total of 11 delegates. The State Bar’s delegates are part of the prestigious California delegation, headed by an elected State Delegate. Philo will serve a two-year term, beginning and ending upon the adjournment of the ABA Annual Meeting in August.

New Associate Joins Kring & Chung’s Las Vegas, NV office

Kring & Chung is pleased to announce that Russell D. Collings has joined its Las Vegas, NV office as an Associate attorney. Collings practices in the areas of general civil litigation, insurance defense, personal injury, family law, real estate law, and immigration. Collings is a member of the Clark County Bar Association, the Central Utah Bar Association, and the American Immigration Lawyers Association.