Failure to Disclose

In the landmark case of Reed v. King (1983), the California Court of Appeal tackled the issue of whether a seller must disclose that a house was the site of a multiple murder. Dorris Reed purchased a house from Robert King, who, along with his real estate agents, failed to inform her that a woman and her four children had been murdered there ten years prior. Reed only learned about the murders from a neighbor after the purchase. She sued for rescission and damages, claiming the non-disclosure affected the property’s market value and desirability.

The court reversed the initial judgment, which had dismissed Reed’s complaint. It emphasized that sellers must disclose facts materially affecting the value or desirability of the property, especially if such facts are not readily observable by …

Imagine purchasing your dream property only to be blindsided by fines and legal battles over issues you didn’t create. This is the reality for the Thomases in Humboldt County, California. After buying a property unknowingly used for illegal cannabis cultivation by previous owners, they now face at least $1 million in fines due to an unpermitted structure. This case underscores the critical importance of thorough property investigations before buying, as hidden violations can lead to significant financial and legal consequences for new homeowners.

Background

In 2019, Humboldt County’s code enforcement department raided the property in Miranda, an unincorporated community, and shut down an illegal cannabis operation. The then-owners were cited for unlicensed cultivation and having an unpermitted structure, leading to an administrative penalty of $12,000 over 90 days.

Six days …