My Parents just recently purchased a home

My parents just purchased a home and now they are finding out that the home has
foundation problems which were not disclosed to them. We have had an inspector
come out and take a look at it and his estimate is of about 50k. is there
anything that we can do? Do we have a case?

Asked on September 6, 2016 under Real Estate Law, California


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

Answered 4 years ago | Contributor

Your parents 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 parents' reliance upon which they justifiably relied to their detriment.
In other words, they would not have purchased the house had they known of the foundation problems.
Fraud is also applicable in cases of nondisclosure of a material fact which the buyer could not have discovered prior to purchase.
Your parents' damages (monetary compensation in a lawsuit for fraud) would be either the benefit of the bargain or the 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.

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