Bought a House with Problems Not Disclosed

It’s finally here! The day you close on your new home. Nevertheless, your excitement dwindles when you discover that the seller failed or didn’t want to make necessary repairs that were pointed out throughout the inspection — or worst of all, you find major housing defects after you’ve moved in. It’s not uncommon in the real estate market, but now you’re wondering what you should do next — and if you should take legal action against the seller.

Finding problems before you move in

In theory, issues with the home need to be worked out prior to you reaching the closing, if it’s a crack in the foundation that was pointed out during the inspection or water damage found during the final walk-through. At this stage, your agent needs to work with the seller’s agent to look into different options towards a remedy. For example –

Ask the seller for the individuals responsible to pay for the home’s repairs.
Bargain for a credit on your closing costs, this will mean the seller pays more when they close.
Get a suitable amount from the seller’s proceeds held back in escrow until the issues are fully resolved.
Decline to allow the closing until the repairs have been satisfactorily completed.

How to tackle unseen home repairs following the sale

What if there was an issue with your new house at the time of purchase, but someone should or could have told you about it previously, but failed to do so? If issues arise in days, weeks or years later, you might be left asking yourself if you are going to have to take on the whole financial burden or if it’s a problem the seller should have to pay for. Follow these steps to deal with any issues that might emerge:

First, identify who is accountable for the repairs.

If you believe you’ve been deceived and want to sue the individuals involved in the sale of the home, the responsible parties may include one or more of these:

The seller: Almost every U.S. state has laws that require sellers to inform buyers of particular defects in the real property, usually by filling out a disclosure form prior to the sale being completed. Many states’ disclosure laws are more in-depth than others, and if any attribute isn’t on the list, the seller might not be required to say anything. Additionally, the seller typically isn’t required to look out for issues. But if there’s obviously something the seller should have told you but didn’t, try to determine if the seller in fact had actual knowledge of the problem. For instance, if the seller doctored over or hid problematic areas, or maybe the neighbors told you about the seller’s past efforts to deal with issues, the evidence is in your corner.
The seller’s real estate agent: Many states’ laws make sellers’ agents accountable for failing to disclose problems they were told of by the sellers or which they witnessed themselves; usually their duties are somewhat restricted. Once more, look into your state’s disclosure laws and determine whether the problem would have been obvious to the selling broker, prior to the sale. An attorney accustomed to residential real estate transactions in your state can find out what responsibility the seller or broker might have had in disclosing the defect issues.
Your inspector. Hopefully, you hired a third party home inspector prior to buying. Theoretically, the inspector should have located defects or problems the seller didn’t even know about. If the inspector overlooked problems that a professional should have found, the inspector could be held accountable. Go over your inspection report carefully to see what it mentioned about the problematic areas of the home.

Determine if you have a legal case.

Once you have determined potential accountable parties, you’ll want to find out if their actions — or inaction — allows you to be compensated. If your circumstances can meet the below requirements, you might have a viable legal case.

The problems were there prior to you purchasing the home. Problems that began when you purchased or are a natural result of the home’s aging or your oversights in maintenance are typically yours to take care of. Needless to say, finding out when a problem began can be difficult. For instance, blockages in the sewer line could be a new problem, or it might be a reoccurrence of a longstanding issue with the growth of roots in the pipes. You might require a professional evaluation. But if the problem might have started prior you to purchasing the home house, read on.
It’s not a clear problem that you may have seen yourself prior to buying. If you noticed a large crack running across the master bedroom ceiling at the open house and just now decided to say something, you most likely have no recourse. But if it was concealed by a false ceiling or recent paint to cover the defect, the matter might be worth going after. Don’t be concerned if the inspector should have noticed the problem. That means you may have a possible case against the inspector, also.
You’ve sustained monetary damage because of the problems. The costs of repairs or related damages (like the destruction of your personal belongings because of a basement flooding) legally becomes the “damages” that you can collect in your underlying lawsuit.
You depended on the nondisclosures or lies. If, for instance, you believed the seller that a remodel job was adequate in choosing to purchase or in placing your price, you acted in confidence. In this situation, the damages might be recouped if the party failed to live up to their responsibilities and the remodel was in fact not anywhere near the degree promised by seller.
No one let you know about the problems prior to the sale, or someone genuinely lied about it. The parties responsible could have been the seller, the seller’s agent or the inspector, as pointed out above.

Think of other options instead of court.

Even if you think you have a viable legal claim against the home seller, inspector, or selling agent, don’t race off to court just yet. You might be able to get what you are owed more inexpensive and with less stress by utilizing each or both of the following alternatives:

Demand letter. Send out a demand letter to the responsible parties requesting for the costs to repair the issues.
Mediation. Let the responsible parties know about the problem and — presuming they don’t agree to reimburse you or repair the issue quickly — request that they agree to go to third party private mediation with you.

File a lawsuit.

If you can’t rectify the dispute with one of the options above, you will have to choose whether to file a lawsuit. You may possibly sue someone based on some of the following, or a mixture of:

Negligence.
Fraud.
Breach of contract.
Negligent misrepresentation.
Breach of warranty.
Failed disclosures (pursuant to your state’s statute).

Steps to file a lawsuit:

Think about small claims court. Filing in small claims court enables you to progress with your case devoid of the costly administrative obstacles of a “typical” lawsuit. You may represent yourself, and in many states, attorneys are literally prohibited.
Determine whether to bring suit in state court. If the amount of monetary damages you’re seeking surpasses the limit of a small claims court, the next thing is to file suit in state court, probably with the assistance of an attorney.
Be sure you are within any required deadlines (“statute of limitations”). Each state has time limits on how long you have, from the date you find a housing defect or honestly should have found it, to sue someone.

Source:

“Your Legal Rights If Your New Home Has Undisclosed Issues.” Your Legal Rights If Your New Home Has Undisclosed Issues., 14 May 2018, www.araglegal.com/individuals/learning-center/topics/home-and-property/undisclosed-issues-when-buying-house.

Real Estate Expert Witness Services by Craig Cherney, Esq.

Craig Cherney is a trusted client advisor and a sought after real estate expert witness who is hired by the nation’s top real estate litigation attorneys to help resolve their litigated real property matters. Craig has appeared as a testifying expert witness before judges and juries in California, Arizona, Nevada and other jurisdictions across the country. Craig Cherney, Esq. Expert Witness Real Estate. 480-399-2342.

Disclaimer: This Post Is Not Legal Advice.

You should not ever depend on an online post for legal advice as the law and codes changes often, information sometimes might not be accurate, there can be exceptions to the rule, and wholesale reliance on such matters could be damaging. Always consult with experienced attorneys for current, effective, and factual legal advice.