Source: http://jbknowsthevalley.blogspot.com/2009/09/real-estate-and-wildfires-what-you-need.html
Timestamp: 2017-10-21 08:22:03
Document Index: 578425189

Matched Legal Cases: ['§ 1662', '§ 1662', '§ 1662', '§ 1662', '§ 1102', '§1932']

My Life in Real Estate...: Real Estate and Wildfires - What You Need to Know...
Real Estate and Wildfires - What You Need to Know...
Hats off to the thousands of firefighters who braved INCREDIBLY hot and humid weather when fighting the gigantic Southern California wildfire now known as "The Station Fire". The firefighters did an AMAZING job of keeping the fire at bay from dozens of communities throughout the foothills of the Angeles National Forest. They worked so so hard, night and day, working 16 hour shifts with no days off, in order to do everything possible to save the homes of countless residents. They really are heroes & do an awesome job!
When disasters such as this one strike, after the initial danger of personal safety has passed, many may be left with unanswered questions regarding the legal ramifications of properties affected by fire. The staff of the Legal Department of the California Association of Realtors (C.A.R.) has come up with a comprehensive list of questions and answers which may be helpful to those affected, and important for all homeowners to be aware of. Following is a copy of the article in full, which is reprinted with permission...
A If the purchase contract between the parties does not specify who is to bear the risk of damage or loss to the premises during the time between the execution of the contract and the transfer of title, the liability of the parties is governed by the California Uniform Vendor and Purchaser Risk Act (Cal. Civ. Code § 1662). Under the provisions of this statute (assuming no fault on the part of the buyer), the risk of loss or damage to the premisesis carried by the seller until the buyer receives either title or possession. (Note: C.A.R.'s Residential Purchase Agreement and Joint Escrow Instructions, Standard Form RPA-CA, revised 10/02, does not dictate how risk of loss is allocated between a buyer and a seller.)
If all or a material part of the premises are damaged before title or possession is given to the buyer, the buyer can cancel the contract and recover any portion of the purchase price paid. It is not clear whetherthe buyer can alternatively elect to enforce the contract with a reduction in the purchase price equal to the loss of value or cost of repair. (Cal. Civ. Code § 1662.)
After the buyer has taken possession or has received title,the buyer bears the risk of loss or damage to the premises (assuming no fault on the part of the seller). Therefore, if the premises are damaged, the buyer must still complete the contract and pay the balance of the purchase price. (Cal. Civ. Code § 1662.)
If the purchase contract does contain a risk of loss provision, that provision will govern to the extent it is different from or more specific than the Uniform Vendor and Purchaser Risk Act (Uniform Act) (Cal. Civ. Code § 1662).
If the damage occurs after the buyer has removed his or her inspection contingency, the buyer generally does not have an automatic right to reinspect the property and approve or disapprove of its condition under most purchase contracts (including C.A.R.'s Residential Purchase Agreement). However, the seller may be obligated to repair the property. See Question 2.
A purchase agreement may, however, require a seller to disclose fire-related information, which in turn may give a buyer a right to cancel a transaction, even if he or she has already removed contingencies. For example, Paragraphs 5A(3) and (4) of C.A.R.'s Residential Purchase Agreement provide that if,prior to the close of escrow, the seller becomes aware of adverse conditions materially affecting the property, the seller must provide a subsequent or amended disclosure or notice, which then gives the buyer a right to cancel the agreement.
"C. Are you (Seller) aware of any of the following: . . . 9. Major damage to the property or any of the structures from fire, earthquake, floods, or landslides.
______ Yes ______ No." (Cal. Civ. Code § 1102.6 (emphasis added).)
A Yes, if it is a material fact affecting the value or desirability of the property to the buyer. Even though the property may not have suffered major fire damage, the seller may be aware of other facts related to the fire that the buyer might not be aware of. Of course, a buyer must also exercise reasonable care to protect himself or herself in a real estate transaction, and is not excused from discovering problems that are within his or her diligent attention and observation.
A California law does not clearly answer whether a seller must disclose past property defects and repairs. At the present time, the law does not appear to require disclosure of past defects and repairs unless the problems may be persistent. In other words, a defect which has been fully repaired and no longer threatens the value or desirability of the property probably need not be disclosed. On the other hand, defects which are difficult to remedy and which may continue to plague the property may have to be disclosed. Given some uncertainty in this area of the law, many sellers may prefer to resolve doubts infavor of disclosure to minimize the risk of liability.
A Yes. Under California Civil Code Section 1933(4), the agreement is terminated automatically if the entire premises are destroyed, unless the parties have agreed to something different. In the event the premises are only partially destroyed, the tenant can terminate the lease by notice to the landlord if the landlord had reason to believe at commencement of the lease or rental agreement that the portion destroyed was a "material inducement" to the tenant to enter into the lease (Cal. Civ. Code §1932(2)).
Again, any contrary agreement between the parties will govern.
A No. The obligation to pay future rent is extinguished when the rental agreement is terminated. However, a tenant maystill owe back rent.
Q 11. Where can I obtain additional information?
A Additional information is available on the Real Estate Resources page on C.A.R. Online. Look for the category, "Fire Disaster Assistance." This legal article is just one of the many legal publications and services offered by C.A.R. to its members. For a complete listing of C.A.R.'s legal products and services, please visit C.A.R. Online at www.car.org. For a list of important contact numbers, please see Appendix A below**.
**(see link to article on C.A.R. website for Appendix A with list of contact numbers)
Readers who require specific advice should consult an attorney. C.A.R. members requiring legal assistance may contact C.A.R.'s Member Legal Hotline at 213.739.8282. C.A.R. members who are broker-owners, office managers, or Designated REALTORS® may contact the Member Legal Hotline at 213.739.8350 to receive expedited service. The access times are Monday through Friday, 9:00 A.M. to 6:00 P.M. Members may also fax or e-mail inquiries to the Member Legal Hotline at 213.480.7724 or legal_hotline@car.org. Written correspondence should be addressed to:
The following article was prepared by and is courtesy of the California Association of Realtors (C.A.R.) Legal Department - reprinted with permission. The entire text of the article can be found HERE. Source: http://www.car.org/legal/2009-qa/firestorms/
Posted by John Barry at 6:33 PM
Labels: attorney, buyer, C.A.R., damage, disaster, fires, firestorms, insurance, legal, seller