Am I responsible for a very expensive repair 3 weeks after closing on our home, if I’ve discovered major plumbing issues that weren’t in the seller’s disclosure?

The seller had some new plumbing installed underground outside, but didnt mitigate the original problem. Once we started running water in the house, we ended up with our new house full of raw sewage and now we cant run water in the house.

Asked on August 19, 2012 under Real Estate Law, Texas

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You can sue the seller for fraud.  Fraud is the 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, you would not have purchased the house had you known that it required major plumbing repairs.

Fraud is also applicable in cases of nondisclosure by the seller as in your situation where the buyer could not have reasonably discovered the true facts.

Your damages (monetary compensation you are seeking in a 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  might 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.


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