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 after the Thomases purchased the property, they received an order from the county to cease cultivation—which they claim they never engaged in—and to demolish the unpermitted building. Unable to afford the $180,000 required for demolition and permits, they used insurance money from a home lost in the Woolsey fire to buy the property.
Legal Battle
The Thomases are now involved in a legal dispute over whether they and other property owners in similar situations should be responsible for paying fees for violations committed by previous owners. According to their attorney, Jared McClain of the Institute for Justice, no outstanding permit violations appeared in the title search conducted when they purchased the property.
Expert Insights
Experts weigh in on whether new homeowners can be held liable for past violations:
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Responsibility of New Owners:
- Local governments typically hold the current property owner accountable for any code violations, regardless of when they occurred. Kirk Pearson, an attorney specializing in real estate disputes, explains that the focus is on the property, not the owner. Gov Hutchinson, assistant general counsel for the California Association of Realtors, supports this view, stating that the current owner is responsible for ensuring the property complies with all regulations.
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Seller’s Disclosure Obligations
- Sellers in California must disclose any facts or defects that could affect the property’s value, including unpermitted work. Failure to do so can result in legal action from the buyer. However, disclosure may not always occur if the seller is unaware of the issues or deliberately conceals them.
Protecting Your Investment
Prospective home buyers should take several steps to protect themselves from inheriting such issues:
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Conduct Thorough Inspections:
Have the property inspected to identify any material defects. Inspections can reveal potential issues with structures, plumbing, wiring, and more.
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Request Permit Records:
Verify with local government offices that all construction and improvements were properly permitted.
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Keep Inspection Contingencies:
While waiving the inspection contingency can make an offer more competitive, it also carries risks. Keeping this contingency provides protection, leverage for negotiations, and peace of mind.
Conclusion
The Thomases’ case highlights the importance of due diligence when purchasing property. Buyers must investigate thoroughly to avoid inheriting unpermitted structures and unresolved violations. Consulting with real estate agents or attorneys can provide valuable guidance in navigating these complex issues. For further information or to schedule a consultation please contact voklaw.com at 855.855.2608 or visit voklaw.com to learn more.
