Karoutas V. Homefeed Bank Case Summary

When a buyer purchases residential property from a seller in a standard resale transaction, the seller is required to offer a real estate transfer disclosure statement to the buyer which describes items in the chosen property which, if known, would affect the buyer's interest in the purchase of the property. Such a declaration is standard practice in this state, and this requirement protects buyers against unknown problems which may accompany such purchases.

This protection is not always available to a buyer in some situations such as those encountered at the trustees' sales. Incidentally, those who buy properties offered by the REO lenders acquiring properties at the trustee's sale also do not receive a real estate transfer disclosure statement from that lender.
HomeFed Bank (1991) Cal.App.3d.767). In this case, a beneficiary and its counsel in a non-judicial foreclosure knew of important facts concerning a property to be sold at the courthouse steps but did not disclose those facts to the bidders at the sale. The missing disclosures were significant in determining the value of the chosen property. The court found that the beneficiary owed a duty to disclose to potential bidders known problems with the