California Real Estate Law — Frequently Asked Questions

It depends on the legal claim. Some claims must be brought within two or three years of discovering the problem, and claims based on a written contract generally within four years. The clock can start running sooner than you think, and evidence disappears fast — so talk to an attorney as soon as you discover a problem.

The TDS is a form California law requires most residential sellers to complete, disclosing known material defects — anything that would affect the home’s value or a reasonable buyer’s decision. California Civil Code § 1102. If a seller knew about a problem and left it off the TDS, the buyer may have a claim.

Generally yes, if you cancel within your inspection, appraisal, or loan contingency periods. After contingencies are removed it gets harder, but a liquidated damages clause typically caps what an owner-occupied home seller can keep at 3% of the purchase price. See our earnest money disputes page for more.

Mediation usually costs a fraction of litigation and can resolve a dispute in a single day, while a lawsuit can take a year or more. Most California real estate contracts also require the parties to attempt mediation first to preserve their right to attorney fees.

If anything about the deal worries you — the disclosures, the agent’s advice, an unusual term — a one-hour review before you sign is far cheaper than a lawsuit after you close. Jimmy is both an attorney and a licensed broker, so he reviews contracts from both perspectives.

Yes. Closing escrow doesn’t waive your right to sue over a defect the seller knew about and failed to disclose. Many defects — foundation issues, unpermitted work, water intrusion — aren’t discoverable until after you move in. The deadline generally runs from when you discovered or reasonably should have discovered the problem, not from the closing date.

The SPQ is a supplemental disclosure form used alongside the TDS on the C.A.R. Residential Purchase Agreement. It asks more detailed questions — prior insurance claims, neighborhood disputes, permit history — that the TDS doesn’t cover. Sellers and their agents must answer both forms honestly; a false answer on either can support a non-disclosure claim.

For fraud claims against a seller, California Civil Code § 3343 sets an “out-of-pocket” measure: the difference between what you paid and what the property was actually worth at the time of purchase, plus additional damages arising from the transaction — such as repair or remediation costs you actually incurred, inspection fees, and moving costs. Section 3343 does not allow “benefit of the bargain” damages against a seller. Claims against your own real estate agent are measured differently, under Civil Code § 3333, because an agent owes you a fiduciary duty. Attorney fees and costs may also be recoverable if the purchase contract includes a prevailing-party clause. See our Real Estate Law page for the legal basis behind these claims, or read How Much Is My Nondisclosure Case Worth? for a full breakdown. Where the concealment was deliberate rather than careless, Punitive Damages in Real Estate Fraud Cases explains when California allows recovery beyond your actual losses.

California permits dual agency, but only with the informed written consent of both parties, and the agent’s duties change significantly once it applies — a dual agent may not disclose either side’s negotiating position to the other. Undisclosed dual agency, or a dual agent who favors one side, can support a breach of fiduciary duty claim. See Dual Agency in California: Is Your Real Estate Agent Really on Your Side? for how these arrangements go wrong in practice.