Can we get out of a house that we bought with undisclosed water damage?

We bought a house 10/31/16 and were
unaware of water damage in multiple areas
inside the house. The damage was not
disclosed by the seller or our realtor. We also
had a inspection completed before purchase.
Can we get out of this house and sue the

Asked on March 16, 2017 under Real Estate Law, Indiana


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

Answered 3 years ago | Contributor

It is unlikely that you will be able to get out of the house; however, you can sue the seller for fraud. You can sue your realtor and the inspector for negligence to recover damages for the cost of repairs.
Fraud is the intentional misrepresentation or nondisclosure of a material fact made with knowlege of it falsity and with the intent to induce your reliance upon which you justifiably relied to your detriment.
In other words, you would not have bought the house had you known of the water damage.
Your damages (monetary compensation you are seeking in your lawsuit for fraud against the seller) would be either the benefit of the bargain or your out of pocket loss.
Benefit of the bargain means that 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 determination for damages for fraudulent misrepresentation permits recovery of the difference between the price paid and the actual value of the property acquired.
You would file one lawsuit naming the seller, inspector, and your realtor as defendants.  Your lawsuit would have separate causes of action (claims) for fraud against the seller, negligence against the inspector and negligence against your realtor.
Damages for fraud were discussed above.
Damages for negligence would be the cost of repairs.

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