Seller Disclosure: Home Buyer Finds Flood Damage After Closing, Seller To Blame?

Added January 19, 2009 by Ilyce R. Glink

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Summary: A home buyer discovers the home she bought has flood damage after closing and moving in, but nothing was indicated through seller disclosure. Now the home buyer is trying to determine if she can sue the seller for not disclosing the flood damage before closing. Ilyce explains that in order to sue the seller, the home buyer must be able to prove that the seller purposely chose not to disclose the flood damage before closing the sale.

Q: We bought a home in Indiana. Just a few weeks after the closing we found out that the den had a rotten sub-floor over concrete.

We were not sure of the cause or the extent of the water so we tore up the floor put weeping tile around the outside and installed new carpet.

After the next long, hard rain we found at least 1" water standing in the den. On the disclosure form the seller stated that there were no moisture or water problems in any area, nor was there damage due to flood, termites, wind or rodents.

The previous owner lived here 18 years and had replaced some of the flooring recently - we saw that when we discovered the rotten sub-flooring. He had to of known about the water damage.

Now we are left with fixing the water damage. This will be a big chunk of change that we do not have. Is the seller liable for these problems?

A: That depends. If you sue, you have to prove that the seller knew or should have known about the problems. You can't suspect that the seller knew, you have to prove it.

There is some evidence that the seller knew - you saw that some of the floor had been replaced. It would help if you could get the name of the handyman or contractor who repaired the floor.

You might call the seller and tell him you're thinking about making some improvements to the home. Ask him if he knows of a good contractor or carpenter. He might just give you the name of the person who repaired the floor.

If you can't get anywhere with the seller, talk to your neighbors to see if the seller had talked to them about this problem. Ask the neighbors if they ever saw a water-proofing company or a flooring van in the house and if they remember the name. You can also talk to the seller's agent about whether the seller had any issues, recently or in the past. If the seller owns up to past problems, ask what he did to fix the issue and which company he used.

It's possible that the seller went back to the same company time and time again. If that's the case, you might get lucky, and the company will have records showing what work was done and when.

Please see a real estate litigator for information about any legal options you may have and the costs involved. Depending on the disclosure laws in your state, and how these laws have been applied, is going to be key to determining whether you have a good case against the seller and whether you have a good chance at getting any money from the seller.

Before you sue the seller, you may have to talk to the seller and give him or her a chance to come clean on the issue and pay for the cost to fix the issue.

Jan. 19, 2009.

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