What are my options?

We just purchased a home Feb 21st. We have
has a lot of rain and on March 28th the
basement has water in it. Upon further
inspect my wife found mold. We had the home
inspected and the inspector found no issues.
Water seems to coming in from a few spots.
The basement is finished.

Asked on March 31, 2018 under Real Estate Law, Illinois


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

Answered 2 years ago | Contributor

You can sue the inspector for negligence which 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 ( monetary compensation you are seeking in your lawsuit) would be what was caused by the negligence such as the cost of repairs.
If the seller (previous owner) knew and failed to disclose the basement water problem, the seller is liable for fraud. Fraud is the intentional misrepresentation or nondisclosure 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 bought the house had you known of the  basement water problem.
Your damages in a 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 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.
You would file one lawsuit naming the inspector and seller as defendants.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

The seller (not the realtor) may be liable IF you can show that the seller knew of the problem (or logically *must* have known given the circumstances and evidence) but, despite knowing of a water infiltration and mold problem, did not disclose it. Knowing of a not-readily discernable or visible problem and not disclosing it may be fraud; fraud would provide a basis for recovering compensation. But fraud requires knowledge: you cannot lie about (which is what fraud basically is--a  lie or misrepresentation, including one by omission if you were supposed to disclose) something which you are yourself unaware of.
Fraud is the only basis for recovering compensation in this case.
The realtor, by the way, would not be liable because they have no duty to investigage, inspect, etc. the property but may legally and freely rely on what the seller told (or did not tell) them.

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