Planning on Flipping a Home in California? Here are 3 Important Legal Issues You Should Understand First
If you’re planning on investing in real estate by purchasing and flipping a home, there are certain legal issues that could throw a wrench into your resale plans. Read on to learn about three of these potential legal issues for California house flippers, and contact a knowledgeable San Diego real estate attorney with any further questions you may have.
What are some legal issues faced by house flippers in California?
- Unrepaired hazards could become a liability for an investor: Most investors who are purchasing a home only to resell it will purchase properties that appear to be a good deal, often because the properties need substantial repairs. If, in a hurry to resell the property, the investor does not complete these repairs thoroughly or to a reasonable level of quality, then the seller could become liable if these hazards aren’t disclosed.
- Incomplete or inaccurate disclosures could spell trouble: Every California seller is obligated to complete and provide a Transfer Disclosure Statement, or TDS, to a prospective buyer. The TDS must include all conditions on the property that would affect the value, enjoyability, or use of the home. If the investor doesn’t include conditions on the TDS that they knew about or should have known about from taking ownership to the home, the seller could be held liable to the buyer for misrepresenting the true condition of the home. Investors purchasing a home for resale do not always spend a great deal of time on the property before reselling it, and they may make guesses about the home’s features and condition when completing the TDS. This strategy could backfire dramatically if a reasonable seller would have known about hazards on the property that weren’t included on the TDS.
- Be aware of any possible zoning issues: Some investors may purchase a property intending to add additional units, rooms, or otherwise modify the home before reselling. However, there may be zoning restrictions on the property that affect how many units can be present on a single parcel, and you should get a real estate lawyer’s help investigating before you purchase the property.
If you need seasoned, professional, and effective help with a California real estate issue, such as a title problem or failure to disclose during a property sale, contact the San Diego offices of real estate attorney Jon Alan Enochs for a consultation, at 619-421-3956.