Batta v. Hunt

March 2025

By Neil Kalin, CAR

Batta v. Hunt: Both an unremarkable case about easements and inconsistent rulings as well as a new precedent about the statutory real estate transfer disclosure statement. 

Batta v. Hunt, 106 Cal.App.5th 295, decided by Division 8 of the Second District and filed on October 29, 2024, is seemingly, and primarily, about the propriety of a trial court making inconsistent rulings. In Batta, the purchaser of an apartment building bought over two decades ago sought to quiet title for its continuous use of parking spaces and a garbage receptacle on the seller’s neighboring property. The trial court found Batta had an easement by prescription, by implication and by oral grant. A prescriptive easement requires use adverse (without permission) to the owner of the servient tenement. By contrast, an easement by implication or oral grant necessitates a finding that the owner of the servient tenement gave permission, either by implied or expressed, to the claimed holder of the dominant tenement. Given those basic real estate law concepts, of course the court’s findings were inconsistent. Either the facts bore out that permission was granted, or it was not, and the holding needs to be consistent with the findings. Ho, hum. The appellate decision on the creation of an easement and the trial court’s findings is neither remarkable, nor unique.  

However, about ¾ of the way through the opinion, the appellate court addresses the seller’s statements made in a real estate transfer disclosure statement (Civil Code §1102 et seq.) (TDS). Here is where the case gets interesting and goes where no case has seemingly gone before. In the TDSi, Hunt “described an easement for parking and trash bins.” At trial, Hunt argued: (i) that the TDS was inadmissible parol evidence that could not be used to contradict the sales contract which did not provide for an easement; and (ii) the “TDS was insufficient to constitute a separate agreement to grant an easement.” The appellate court agreed with Hunt.  

At pages 308-309, the appellate court laid out its reasoning. “[T]he TDS was merely informational … Hunt’s signature did not convert the TDS from a disclosure statement to a binding contract or offer …Rather, Hunt’s signature reflects her statement that the information in the TDS was true and correct, nothing more.” Some may find this holding surprising, but it is consistent with the language of both the statute and form. 

Although not mentioned in the Appellate Court opinion, the language of the TDS itself supports the conclusion of the court. The opening paragraph of the TDS, set by statute at §1102.6 of the Civil Code provides in all capital letters, “THIS STATEMENT IS A DISCLOSURE OF THE CONDITION OF THE ABOVE DESCRIBED PROPERTY IN COMPLIANCE WITH § 1102 OF THE CIVIL CODE AS OF (DATE) _________. IT IS NOT A WARRANTY OF ANY KIND BY THE SELLER(S) …” (emphasis added) 

Similarly, section II of the TDS form, also in bold capital letters, provides, “… THIS INFORMATION IS A DISCLOSURE AND IS NOT INTENDED TO BE PART OF ANY CONTRACT BETWEEN THE BUYER AND SELLER.”  (emphasis added)  

Immediately above the sellers’ signature lines is the statement, “Seller certifies that the information herein is true and correct to the best of the Seller’s knowledge as of the date signed by the Seller.”  The seller does not promise that the condition will remain the same on the date the buyer takes possession, or the condition described in the TDS will not be altered by contract. Immediately above the buyer’s signature is the line, again in all bold capital letters, “I/WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS STATEMENT.” As the appellate court states, Batta’s (the buyer) “signature simply reflects that they received the document.” There is no binding, contractual agreement.  

In the Batta case, the contract did not mention the easement, and presumably neither did the title report. The buyer was not granted an express, contractual, easement by the TDS. §1102.3 gives the buyer who receives a TDS after an offer has been executed the right to rescind the contract. If not satisfied that a representation in the TDS is not accurately reflected in the contract, the buyer can use the right to cancel to try to renegotiate the contract terms. If the seller is willing, then the contract should be amended. If the seller is not, then the buyer’s choices are to take the property on the negotiated terms or cancel.  

Those who think the consequence of the Batta case is to render the TDS legally toothless are wrong. First, a seller’s complete failure to provide the TDS gives the buyer the right to cancel any time before transfer of title. Second, §1102.13 provides that “any person who willfully or negligently violates or fails to perform any duty prescribed by any provision of this article shall be liable in the amount of actual damages suffered by a transferee.” Case law is replete with examples of sellers who suffered liability or other consequences for failure to honestly or accurately comply with the statute’s requirements – it is just that a claim for breach of contract is not among the available remedies. Richman v. Hartley (2014) 224 Cal.App.4th 1182; Realmuto v. Gagnard (2003)110 Cal.App.4th 193; Sweat v. Hollister (1995) 37 Cal.App.4th 603; Alexander v. McKnight (1992) 7 Cal.App.4th 973; Loughrin v. Superior court (1993) 15 Cal.App.4th 1188; In re Bartenwerfer, Bkrtcy, N.D. Cal. (2016) 549 B.R 222. 

Buyers looking for solace in the standard C.A.R. residential purchase agreement (RPA) will not find it. Paragraph 11 of the RPA contractually requires the seller to provide the TDS to the buyer as specified in §1102 et seq. Paragraph 11 is nothing more than a reiteration of the various statutory requirements found in §1102 et seq. Contractually addressing a disclosure mandated by law does not convert that same disclosure item into a contract term but rather serves as a reminder to buyers and sellers alike what their rights and responsibilities are under the law. One would think that courts would laud C.A.R. for including paragraph 11 into the RPA for making sure that statutory obligations are complied with, and buyers receive all the information they are entitled-to. The alternative of leaving the information out of the contract is that legislatively mandated disclosures would be less likely to be made, potentially resulting in increased disputes. It is far better to duplicate statutory mandates and to understand them to be what they are, no more and no less, than to misconstrue the language of the standard form into becoming something other than what it is and is intended to be.