What to do about a seller’s nondisclosure of house defects?

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What to do about a seller’s nondisclosure of house defects?

We bought a house abvout 7 weeks ago. Seller disclosed no pertinent information on the property disclosure and disclaimer form. They included a disclaimer form with the property disclosure, which we unknowingly signed. This also doesn’t list any latent defects of the house. This weekend, water was leaking into the basement from outside cracks in the foundation near a basement window. We had a guy out to look at it, and he said there were repairs done to the house over the last few years that looked like someone tried to fix some of the problems, so the people who sold it to us should have known. Can we sue them for reimbursement for the damage despite the “no representions or warrenties” stuff in the disclaimer?

Asked on November 3, 2012 under Real Estate Law, Maryland

Answers:

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

Answered 9 years ago | Contributor

You can sue the seller for fraud.  Fraud is the misrepresentation 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 purchased the house had you known of the cracks in the foundation and/or water leaks.

Fraud also applies in cases of non-disclosure of material facts by the seller, which the buyer could not have reasonably discovered prior to purchase of the house.

Fraud will invalidate the disclaimer you mentioned.

Your damages (monetary compensation you are seeking in a lawsuit for fraud) 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.


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