This is not true, if it sold to be used legally on the street by law it is to be sold with a current smog cert. end of subject. Now if it were sold as a parts or project vehicle with no intention of ever hitting the road again or a bucket project then you can sell it as is.
This may be true from a legal standpoint but the reality of it is there is nothing keeping you from buying or selling a vehicle without a recent smog and without any legal repercussions, UNLESS the buyer wants to pursue legal action. If a seller is 100% honest about the smog status of a vehicle and a buyer is willing to take responsibility for the smog then go for it, why not, the dmv will not initiate any legal recourse.
I purchased a registered samurai, under the circumstances the seller did not provide a smog, I was willing to deal with it. The way it worked was I was able to pay the title transfer fee's and put it in my name but it was a incomplete transfer until I could provide a recent smog, basically I wouldn't receive the title until then. 3 or 4 months later the registration was due, I still hadn't smoged it so I went to the dmv paid the non op fee, the funny thing is by non oping it they could now complete the title transfer and I received the pink slip (title). Several months later I was offered a decent amount $ for it, it wasn't really for sale but I decided to do it. I told the buyer that I hadn't smoged it and wasn't sure if it would smog, he didn't care and was also willing to deal with it. I turned in my release of liability and that was it. He eventually had it smoged and is still putting it around today.
In the case of the OP it sounds like he was mislead and was not willing to take responsibility for the smog, if he chose to use the "law" it would have been on his side.
