Is home buyer allowed to back out from purchase in case seller sent materially different disclosure form after buyer removed contingencies?

Question

Before visiting a property seller sent C.A.R. TDS form via email that stated that "guest house was remodeled without permits". Since guest house was advertised as part of property and included in legal living area then buyer assumed that it was built with permits, but merely just remodeled without permits.

Then buyer made offer that seller accepted. Buyer removed all contingencies.

However, after inspection contingency was removed the seller sent to buyer a new and updated C.A.R. TDS form that clearly states "guesthouse was remodeled and built without permits".

Two questions:

1. Can buyer back out from purchase as he is getting different property than seller advertised (less bedrooms and legal living square footage)?
2. Was it buyer's responsibility during one of the contingencies to find out about unpermitted work?

Answer 1

I believe that buyer is allowed to back out within 3 days as per following paragraph from C.A.R. purchase agreement:

(6) In the event Seller or Seller's Brokerage Firm, prior to Close Of Escrow, becomes aware of adverse conditions materially affecting the Property, or any material inaccuracy in disclosures, information or representations previously provided to Buyer, Seller shall promptly provide a subsequent or amended disclosure or notice, in writing, covering those items. However, a subsequent or amended disclosure shall not be required for conditions and material inaccuracies of which Buyer is otherwise aware, or which are disclosed in reports provided to or obtained by Buyer or ordered and paid for by Buyer.