Question for those who live in California

[plowhog]

there should be a legal obligation by the seller to divulge the issues with the property. Afterall isn't this what escrow is for? To check the title

Yes and no. In CA the Seller is required to do mandatory disclosures about the property. The recourse if they do not disclose is to sue-- but how many people can afford that after spending their $$ to buy a home? Not to mention most "grow" businesses operate on cash. So I presume the seller is long gone with few assets to chase. Adding a fruitless lawsuit on top is just added misery.

Title insurance companies only find recorded items such as easements. They have no way to find unrecorded items. (I just discovered an unrecorded easement on my property dating back to the 1940's.) They typically don't look into the history of permitting. In commercial real estate in CA you can purchase "upgraded" title insurance to insure against unpermitted work-- I can't recall if that applies to residential or not.

I predict an explosion of these types of situations where sellers get burned. The recent "national settlement" that decoupled seller and buyer commissions will result in a lot of buyers bypassing the "greedy real estate agent." In virtually every real estate thread here on TBN the theme is that real estate agents are fatcats who don't earn their money. So it will be natural for buyers to be glad to cut them out. The buyers (in many cases) won't know the mistakes they are making, the questions they are not asking, the inspections they are not doing, or the contract language they should have added, until after escrow closes. Then they will find themselves behind the 8-ball.

If I owned a real estate attorney firm I'd be hiring as many lawyers as I could find right now.

 

[ericm979]

I used to live in that county. It's a lightly populated county, especially that part. It's mostly old logging families who now grow dope and kids of the hippies who moved there in the '70s and grow dope, plus people who moved there since to grow dope. There's some tourism but the largest driver of the economy is marijuana, both legal and not legal. Many of the rural properties for sale have remnants of previous grows on them, often quite extensive. And there are a lot of unpermitted structures. It's not like either is an unusual problem.

The county has normally not been that bad, unlike my county. I'm wondering if the buyers somehow got on the wrong side of the county (which may not have been their fault) and that's not mentioned in the article.

But to be honest, I think the buyers should have looked up the permits for the structures to make sure they existed and were finaled.

 

[jyoutz]

Wow that is nasty. But somewhere there should be a legal obligation by the seller to divulge the issues with the property. Afterall isn't this what escrow is for? To check the title

I thought that title insurance was protection for a buyer?

 

[ultrarunner]

Yes and no. In CA the Seller is required to do mandatory disclosures about the property. The recourse if they do not disclose is to sue-- but how many people can afford that after spending their $$ to buy a home? Not to mention most "grow" businesses operate on cash. So I presume the seller is long gone with few assets to chase. Adding a fruitless lawsuit on top is just added misery.

Title insurance companies only find recorded items such as easements. They have no way to find unrecorded items. (I just discovered an unrecorded easement on my property dating back to the 1940's.) They typically don't look into the history of permitting. In commercial real estate in CA you can purchase "upgraded" title insurance to insure against unpermitted work-- I can't recall if that applies to residential or not.

I predict an explosion of these types of situations where sellers get burned. The recent "national settlement" that decoupled seller and buyer commissions will result in a lot of buyers bypassing the "greedy real estate agent." In virtually every real estate thread here on TBN the theme is that real estate agents are fatcats who don't earn their money. So it will be natural for buyers to be glad to cut them out. The buyers (in many cases) won't know the mistakes they are making, the questions they are not asking, the inspections they are not doing, or the contract language they should have added, until after escrow closes. Then they will find themselves behind the 8-ball.

If I owned a real estate attorney firm I'd be hiring as many lawyers as I could find right now.

The Realtors Insurance kicked in several times I can vouch for including damage during showing and a prospective buyer's child being injured when the Realtor did provide a warning.

A good Realtor heads off problems before they happen primarily through avoidance... plus has a team of local service providers at the ready...

 

[plowhog]

I thought that title insurance was protection for a buyer?

These sort of assumptions are why so many future buyers are going to get hurt based on the upcoming changes to the real estate industry. Buyers who previously had a RE agent to assist will sometimes wing it on their own, to their detriment.

You are correct that there is protection about title. Subject to many disclaimers in the title policy. But title insurance does not cover the many outside circumstances that can bite a buyer. Like undisclosed defects, or in the above case, non-permitted structures. Their "title" is fine. They most certainly own and have secure title to what is now the albatross around their neck.

 

[ultrarunner]

I thought that title insurance was protection for a buyer?

Most policies I have seen only cover issues of record and clear title.

On commercial property I have ordered much more expensive Title search going back to Spanish Land Grants...

 

[plowhog]

On commercial property I have ordered much more expensive Title search

I was involved in a commercial property transaction where the property was thoroughly investigated with numerous inspections. During escrow, I ordered a records package from the County and verified the County's recorded square footage matched the building square footage.

5 years later, a buckled front sidewalk got the County's attention. It was then they "discovered" an additional 10,000 ft. had been added to this building without a proper permit. They threatened the owner with fines compounded over 5 years-- woweeee. They would not budge. WTH-- how could the County have the property footage in its own records if it was not properly permitted? But ... they would not budge.

I went over the County's head to the local Supervisor. He got the County to back down. After payment of a few thousand dollars it all got healed up. The buyer had elected not to purchase the upgraded title policy since the square footage had been verified (by me) directly with the County. So he was out a few thousand dollars, but at this time the building had appreciated by about $1M so he was not exactly unhappy.

 

[ultrarunner]

Property Owners are captive and sitting ducks... it's not like you can pack up and take Real Property with you...

It's now a total reversal from the days of mobility and Landed Gentry having total control of owns land to what is now an ever increasing bundle of responsibilities.

I know a few well off that believe owning is for the naive... they say it's all about control...

 

[ultrarunner]

California to start pilot program for mileage-based tax for motorists | Team-BHP

According to media reports, the increasing number of EVs on the roads of California has started causing a dent in the state's budget.The state charges $300 a year as gasoline tax for its ICE-powered vehicles, ...

www.team-bhp.com

 

[scootr]

California to start pilot program for mileage-based tax for motorists | Team-BHP

According to media reports, the increasing number of EVs on the roads of California has started causing a dent in the state's budget.The state charges $300 a year as gasoline tax for its ICE-powered vehicles, ...

www.team-bhp.com

Curious exactly how CA will calculate the mileage a person drives. Monitor device or honor system? Annual odometer inspection?
Crazy too = give millions of dollars in EV incentives and then devise a system to take it back. Make up your mind. You are going to pay people to drive EVs or you are going to charge them for driving EVs? It will cost millions of dollars to implement any sort of system. The size and reach of govt continues to grow. Essentially feeding upon itself