Q: We sold our home in May. We disclosed the fact that we had had water in basement on the seller disclosure form. We always assumed the basement water issue was due to faulty gutters and an excessive amount of rainfall.
The buyer now wants us to pay for waterproofing the basement because she has had water in the basement. Does she have any grounds to sue us after the fact?
A: Most states have a seller disclosure law for residential real estate transactions. These laws require a seller to disclose to a buyer defects or major problems with a home.
To answer your question, you first have to determine whether you had an obligation to disclose the water problem to the buyer. While you believed your water problem was a minor issue, you still elected to disclose the issue to the buyer. You were right to disclose the problem.
If you had failed to disclose the water problem to the buyer, the buyer might have been able to sue you under state seller disclosure laws. You might have become liable to the buyer for the cost to repair the problem and even the buyer’s costs to litigate the matter against you.
In your case, you disclosed the water problem to the buyer. If you were truthful in your disclosures to the buyer, the buyer should not be able to then use the seller disclosure laws against you.
Once you disclose a problem like water in the basement, the buyer has the opportunity to inspect, investigate and decide ultimately whether to buy the home. The buyer could also ask you to investigate and fix the problem as a condition of the contract. If the buyer decides to proceed with the purchase, the buyer has purchased the home with the knowledge of the problem.
However, in some states, the real estate contracts often used contain representations regarding the condition of a home. For example, a real estate contract could contain a provision that states that the seller represents to the buyer that the roof is water tight and free of leaks.
Home Sale Contract and Seller Disclosure Law May Differ
If your purchase contract contradicts the terms of your seller disclosure law, the purchaser might attempt to sue you under the contract, rather than under the remedies provided by your state’s seller disclosure laws.
And, finally, if the purchaser is simply trying to get you to pay for the repairs because you were mistaken as to the cause of the water damage, that might not be a winnable case. The key to whether you would be liable for the water damage in this instance is whether you knew of the problem and the source of the problem and failed to disclose it.
Water problems in basements can be tricky situations. Some basements can take in water due to cracks in the foundation, a high water table level, poor drainage around a home, clogged gutters and downspouts, or broken sump pump systems. You can also get water in a basement if the roof leaks, among other possibilities.
There are probably many other reasons why water collects in a basement, but your duty as a seller under most seller disclosure laws doesn’t include identifying why a problem occurs. It is simply to let the buyer know there is an issue.
If you were truthful in your seller disclosure statement to the buyer, and your contract does not contain a provision that contradicts the terms of the disclosure about the basement, and you did not make any other representations to the buyer about the source of the problem, you should not be responsible for the fixing what is now the buyer’s problem.
As a seller, once you have made a representation under a seller disclosure form to a buyer, you should not try to minimize the repair or try to represent to the buyer a fix for the repair unless you have some knowledge or have been told what needs to be done to fix it. If a seller tells a buyer of a problem with a house, a seller should leave it at that.
A seller should not try to guide the buyer on how to repair the problem. If a seller has a repair estimate or other paperwork from a contractor, the seller could give that paperwork to the buyer, but the seller should always be careful not to minimize the problem or minimize the cost to repair the problem.
What you need to do now is speak with a knowledgeable real estate attorney about the situation and what you’ve said to the buyer. You want to make sure that you haven’t given the buyer any cause to go after you when you said you thought the problem was caused by the gutters and excessive rainfall.
To our readers: please keep in mind that when we respond to your letter, we may have to make some factual assumptions on issues that may not be clear to us from what you’ve written. Above all, remember that we’re giving you general information, and not legal advice. For specific help on any legal issue, but particularly those that involve state law, please seek the help of a competent attorney in your area.