Q: I purchased a home in March. The seller did not disclose any material defects on the disclosure form, however the finished recreation room in the basement floods. I knew the basement could get damp due to the dehumidifier that was plugged in there.
The basement is carpeted. It has flooded three times since I purchased the property. The owner advertised the room as extra usable space, however it is not habitable due to the flooding. Also, the leak is on the second step along the outside wall, but no one could see it as they carpeted the wall to conceal the problem.
In my view, the seller did not disclose a material defect and he purposely concealed the problem. Do you know of an attorney that will take this case to get the seller to pay for the repairs so I can use the room?
A: In most states, sellers are required to deliver a written disclosure to a buyer identifying all known major defects in a home. Some states have lengthy seller dislcosure forms for sellers to fill out while others may have a one page seller disclosure form. Some states provide that if a buyer can prove that the seller lied on a seller disclosure form, the buyer not only can get damages from the seller to correct the item but can also recover any attorneys fees spent in going after the seller.
Seller disclosure cases often hinge on the buyer being able to prove that the seller knew or should have known about the problem. In your case, you believe that the seller did not disclose a material defect and purposely concealed it from you and your home inspector. If you are correct and can prove that the seller purposely concealed the problem, you might be able to sue the seller and get the seller to pay to correct the problem.
You should keep in mind the cost to repair the problem versus the cost of a lawsuit. I get frequent letters from readers complaining about problems with their homes and claiming that their sellers failed to disclose many things to them. But when it comes right down to it, you need to investigate the problem and determine the cost to fix it.
I have heard from people that have had water problems in their basement only to find out that the water problem was caused by clogged downspouts – a quick and easy fix. I have heard from other people that landscaped their home after moving in only to find out that the ground was pitched towards their home causing water to come into the basement. In many cases these fixes were inexpensive. You can hire a home inspector to give you more insight into your problem or a reliable contractor.
Watch our video on Finding a Great Home Inspector
If you investigate further and find out that the fix for your problem is quite high, then you might want to pursue the avenue of having the seller pay for the problem. In some cases, before you even talk to an attorney, you might benefit from calling your real estate agent to discuss the problem with the seller. You might find that the seller is willing to compensate you from the problem rather than face more calls from you and aggravation in the future.
One last thing to keep in mind with the current economic situation: if you bought a short sale from a seller that lost his or her job, even if you have a rightful claim against the seller, if the seller doesn’t have the money to pay to repair the problem, you might get stuck with not only the repair but also with a large legal bill.
You should have a discussion with an attorney who has had experience (and success) in suing over seller disclosure laws. While the attorney’s fees are often recoverable, most attorneys will not take the case on contingency, which means you’ll have to cough up the cash up front to pay the attorney while the suit is ongoing.
If you don’t know a litigator who has had seller disclosure experience, contact your local bar association and ask for a couple of names and start there. You can also contact the head of the litigation committee and the head of the real estate committee and ask each of those individuals for help in locating the appropriate attorney.
Get more information about seller disclosure laws and home inspections
During a home inspection our inspector discovered a condensation leak in an air handler inside a wall cavity. He noted some cupping of the wood floor on one side of the wall. No mold was observed on the drywall, inside the wall cavity or on the wood floor or baseboard. Cupping was about 5 square feet 1 foot away from the wall. Condensate water was observed to be leaking inside the wall cavity directly on to the concrete slab.
The sellers agreed to fix the leak and we agreed to their offer of a $2500 allowance to repair the wood floor, any damaged drywall and painting.
At the final walk through 3 weeks later with, all furniture and area rugs removed cupping of the wood floor was observed over a much greater area about 1/3 to 1/2 of the living room where no adjacent to the wall where the leak occurred (about 200sf) where no cupping had previously been observed. It was clear that water leaking from the wall cavity had flowed under the floor, saturating the sound attenuation subfloor and the underside of the wood flooring. Sellers had made no efforts to dry the floor out after they had fixed the leak. water from the leak had remained under the floor between the inspection and the final walk through and the floor had become damaged during this time.
We asked to delay the closing to have a professional flood restoration company estimate the damage, asses the amount of water remaining under the floor, estimate how long it would take to dry out, provide estimates for drying out the floor by mechanical means or replacing the floor or part of the floor and prepare an estimate and check for mold that could have grown during the three weeks that we knew the floor had remained wet.
Sellers refused entry to the property and are threatening to confiscate our good faith deposit because we did not close.on schedule.
If a new or larger scope material defect is observed at a final walk through that was not present or was not observed or did not exist at the initial inspection is the buyer still required to close or lose their deposit?
When fixing a leak is the seller considered negligent if they do not dry out the flodded area even if this damage?
We are offering to close if the seller files a water damage claim with their insurer and fixes the damage at no expense to them with the insurance money. They are planning to keep our deposit.