Cliff Horner

Email Address:

Contact Number:

For the Seller’s Expert (an Architect) to be considered the Seller’s Agent and for His Knowledge to be attributed to Seller, the Seller’s Expert Must Deal with The Buyer in Some Capacity - otherwise His Knowledge is not necessarily imputed to the Seller and Seller Must Have Actual Knowledge of the Defects to be Liable.

Summary:

Pursuant to a recent California Court ruling, a Seller was not imputed with the knowledge of Seller’s expert, here an architect who designed the remodel of a home and applied for and was granted a commercial use permit, because the expert did not speak to the Buyer and the Seller did not have actual knowledge of the defects. (See RSB Vineyards, LLC v. Orsi* (2017) 15 Cal.App.5th 1089).

In this case, after purchasing the Property, a Healdsburg winery, tasting room and recently renovated home, Buyer’s engineer discovered numerous structural issues that could only be repaired at a cost exceeding that of tearing down the Property. After the Buyer sued, the Court found that to the extent Seller’s architect was aware of the defects complained of by Buyer, that knowledge was acquired while the architect was acting in the role of a designer and builder, not as Seller’s agent. Further, the Court found that the expert was not an agent, as an agent is one who represents the principal in dealings with a third person, and here, the expert only interacted with the Seller (not the Buyer). Therefore, because the Seller’s architect’s alleged knowledge of the defects could not be imputed to the Seller, and because the Seller had no actual knowledge of the defects, the Seller was found not liable.

Take Away:

The Buyer should at a minimum have contacted the Seller’s architect to inquire about the Property. Then, the expert’s representations to Buyer could have potentially been made as an agent of the Seller, and his knowledge imputed to the Seller. As an added precaution, prior to waiving inspection contingencies, a Buyer should have the Property thoroughly inspected by his own experts and not rely solely on the Seller’s experts or on the Seller’s disclosures.

*The above does not constitute legal advice and should not be acted upon without seeking advice from a licensed lawyer.