The Answer To This Week's Legal Scenario is Posted: Contract Addendums - Who Signs What And Why?

Real Estate Broker/Owner with Maui Life Homes / Metro Life Homes RS-78439 / BRE #01708344

Ralph's Weekly Legal What-If Scenarios: Contract Addendums - Who Signs What And Why?

Each Monday, I'm going to post a "What If" Scenario that presents a legal issue in a real estate hypothetical situation.

Each Sunday, either the correct legal answer (or most likely legal resolution) to the situation will be posted.

This week's "What-If" Scenario was based on contract addendums.

If you'd like read this week's blog, click here:

Here is this week's scenario:

Jane is the listing agent, and is representing her seller, Adam, in an escrow.  Steve is the buyer's agent, and he is representing his buyer Carol.

Things are going fairly well with the escrow, and the loan approval took a little longer than expected, thus creating the need to close escrow a few days later than what the contract states.  Carol is using her brother-in-law Derek as the loan broker to obtain the loan.

An addendum is drawn up to extend the closing date out 5 more days than the original contract states.  The addendum is drawn up using ZipForms C.A.R. form ADM, and the principles and agents sign the form in the designated signature lines on the addendum.

About a year later, Carol, during her plans to add on a new wing to the home, discovers via her contractor that there was an old underground septic tank that was never disclosed to her by the seller.  The seller was aware of the septic tank, but did not disclose it, not even to Jane his listing agent.

It will cost Carol approximately $20,000 to excavate the septic tank and fill in the soil properly for the type of renovations she is making.

Carol is considering litigation to recover the damages she must pay to remediate the old septic tank.

If Carol decides to file a lawsuit, will anyone be be responsible for the damages?  And if so, why?



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Ralph Gorgoglione

Hawaii and California Real Estate (310) 497-9407
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