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Commercial Property: What Must be Shown to Sue for Real Estate Failure to Disclose?

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Property sellers have a duty to disclose certain information to their buyers. As explained by the California Department of Real Estate, there is a state statute in place that requires residential property sellers to include a Real Estate Transfer Disclosure Statement (TDS) as part of the sale. While a TDS is not mandated for commercial property sales, commercial buyers are still protected by common law disclosure requirements. Here, our Los Angeles commercial real estate lawyer explains what you need to prove to bring a successful failure to disclose lawsuit in California. 

Five Required Elements of a Commercial Real Estate Non Disclosure Claim

Commercial real estate failure to disclose claims typically arise under common law. State law requires commercial property sellers to disclose material facts that impact the market value and/or general desirability of the property. This is a relatively broad definition that raises an important question: What conduct qualifies as a failure to disclose in a commercial real estate sale in California? While the answer depends on the specific facts of the case, there are five things that commercial real estate buyers need to prove when suing for failure to disclose: 

  1. The undisclosed information was material, meaning it had an adverse impact on the market value or general desirability of the property;
  2. The seller had knowledge of the issues impacting the property’s value; 
  3. The adverse information in question was not accessible by the buyer
  4. The seller intended to induce action by the buyer; and
  5. The buyer suffered actual damages due to the non disclosure. 

Note: Beyond the state’s common law requirements, commercial property sellers in California are also required to make certain limited statutory disclosures. Most notably, state law requires sellers to disclose if a property is located in a flood zone, high fire zone, or an earthquake zone (Cal. Civ. Code § 1103). 

How Our California Real Estate Litigation Attorney Can Help

We are a full service real estate litigation law firm representing clients in complex matters. If you or your company suffered damage as a result of the commercial real estate seller’s failure to disclose material facts that impact the market value of the property, our legal team is here to help. Among other things, our Los Angeles real estate dispute attorney will:

  • Conduct a comprehensive, confidential assessment of your case;
  • Answer questions and explain your options;
  • Identify all potential causes of action, 
  • Investigate the matter—assembling the evidence needed to prove liability for failure to disclose; and
  • Take legal action to protect the interests of your business. 

Get Help From a Los Angeles, CA Real Estate Litigation Attorney Today

At Wagenseller Law Firm, our Los Angeles commercial real estate attorney is an experienced, results-oriented advocate for clients. If you have questions about commercial real estate or a seller’s failure to disclose, we can help. For a strictly confidential initial consultation, please contact our legal team today. From our law office in Los Angeles, we serve communities throughout Southern California. 

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