What to do if we bought a home this summer but have since found out that it is not up to code?
Question Details: As soon as we moved in we began repairs. During the repairs we have found that they house was not built up to standard codes. These code violations are costing us thousands and thousands of dollars to repair. They also pose a serious potential for illness if we do not make the repairs (mold). The owner was also the builder of our home. What can we do? Can we force them to pay for the repairs that are easily going to be in the 70-100K range?
You can sue the seller for fraud. Fraud is the intentional misrepresentation of a material fact made with knowledge of its falsity and with the intent to induce your reliance upon which you justifiably relied to your detriment. In other words, had you known of the code violations, you would not have purchased the house.
Fraud also applies in cases of nondisclosure where the seller failed to disclose material facts which the buyer could not have reasonably discovered prior to purchase.
Your damages (monetary compensation you are seeking in your lawsuit for fraud) would be either the benefit of the bargain or your out of pocket loss.
Benefit of the bargain means a defrauded purchaser may recover the difference between the real and represented value of the property purchased regardless of the fact that the actual loss suffered may have been less.
Out of pocket damages for fraudulent misrepresentation permits recovery of the difference between the price paid and the actual value of the property acquired.
Your lawsuit against the seller for fraud could also include a separate cause of action (claim) for negligence against the home inspector for not detecting the code violations. Negligence is the failure to exercise due care (that degree of care that a reasonable home inspector would have exercised under the same or similar circumstances to prevent foreseeable harm). Your damages for negligence against the home inspector would be the cost of repairs.
