What recourse does a buyer have when they find a house they purchased has black mold in the walls?

My daughter and her boyfriend just bought a new home. On the walk-through with the real estate agent they were

working with notified them that there had been water damage in the basement from a leak but the issue was

resolved. After signing, they found water standing in the basement. After further investigation they found mold inside multiple walls. It may take thousands of dollars to repair. They have no idea where the water is coming from. They are first time buyers and I feel they were mislead by the agent the seller the home was a repo and they were

never allowed to talk to the actual seller.

Asked on October 8, 2017 under Real Estate Law, Missouri

Answers:

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

Answered 3 years ago | Contributor

Your daughter and her boyfriend can sue the seller and real estate agent 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, your daughter and her boyfriend would not have purchased the house had they known the water leak had not been resolved and /or knew of the mold.
Damages (monetary compensation) in a lawsuit for fraud would be either the benefit of the bargain or 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 determination of 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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