Can I get out of a contract if I was lied to?

I am purchasing a house on a land contract, rebuilding my credit after a divorce. On the day of the walk thru with the owner I asked her if the basement leaked. Her answer no I have never known it to leak before. Right before I moved in some pipes burst due to the cold, she did pay to have that fixed. When in the spring the basement started leaking I assumed it was due to something that happened when the plumbers fixed the leak. A man comes to mow my yard and while talking with him, he tells me he had once lived in the house and they had to move because the basement leaked so bad. I am livid Our contract is an as is contract…but she looked me straight in the face a blatantly lied to me. Every time it rains I get 1-2′ of water in the basement. Is there anyway I can get out of this contract without losing the 6k I have already given her? Thanking you in advance.

Asked on June 6, 2016 under Real Estate Law, Kentucky


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Yes, you can likely get out of the contract (rescind it) and get your $6k back. Fraud is when someone knowingly or intentionally (when they provably did know, or logically, under the circumstances, must have known, the true situation) misrepresents, or lies about, a material, or important, fact and you reasonably (i.e. there were no good reasons to doubt her) rely on that fact. Sellers are required to disclose water infiltration problems and other serious issues which are not readily apparent on inspection or walk-through, and a failure to do so can be fraud, as can be lying straight to your face. Fraud provides grounds to rescind a contract: that is, to undo it. You would get your money, she gets the property back. Based on what you write, you may have a case for fraud. You are advised to retain an attorney to pursue it, however: fraud, while conceptually straightforward, has certain procedural wrinkles in pleading it, so you are better off letting a lawyer help you.

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