Real Property Sales Agreement Upheld Against Claims of Conditions Precedent

Nasey v. Fell Holdings LLC
A174623 (First Appellate District, August 10, 2026)

After a foreclosure of two mixed used properties, the former owner and new owner entered a lease and repurchase agreement with escrow deadlines that were extended multiple times via addenda. Ultimately, the former owner failed to meet the escrow deadline and then filed suit. The basis for the lawsuit was that certain statutory disclosure requirements were conditions precedent to his performance, that he had the right to conduct a further environmental assessment required by his lenders, and that the sellers’ refusal to allow such testing excused his nonperformance. The Superior Court of San Francisco County ultimately dismissed the case without leave to amend. 
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The California Court of Appeal affirmed the decision of the trial court, holding that, even assuming statutory disclosures under Civil Code section 1102 were required, the parties’ contract and subsequent addenda made clear that such disclosures were not a condition precedent to the appellant’s obligation to perform. The court also found no allegation that the sellers had knowledge of hazardous substance releases requiring disclosure under Health and Safety Code section 25359.7. Further, the court concluded that the appellant was not entitled to suspend closing or to conduct additional environmental testing beyond the contract’s terms, and that the sellers’ refusal did not constitute breach.