Can I sue for not haveing full disclosure on a home after I closed, especially since the seller was also the builder?

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Can I sue for not haveing full disclosure on a home after I closed, especially since the seller was also the builder?

I’m military and bought a home 7months ago. I had all the inspections on the house and septic field and now I have a septic system that overflows because it was never cleared for use by the state health dept. Further investigation revealed the house never had a certificate of occupany. The builder never had the septic certified for use so it is an illegal system and he never installed the sewage pump per designs to the state and his permits expired. There are four houses in total that are in the same situation sewage in yard and under house. Can I sue him for not having full disclosure since according to the state and city im living there illegally since it was never approved by the city or state to be occupied?

Asked on May 14, 2012 under Real Estate Law, Virginia

Answers:

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

Answered 8 years ago | Contributor

You 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 reliance upon which you justifiably relied to your detriment.  Fraud also applies in cases of nondisclosure where the seller did not disclose facts which the buyer could not have reasonably discovered.  The seller's nondisclosure regarding the septic system was to induce your reliance on which you justifiably relied to your detriment.  In other words, you would not have purchased the house had you known the true facts about the septic system.

Your damages (the amount of 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 a defrauded purchaser can recover the difference between the real and represented value of the property purchased regardless of the fact that the actual loss suffered may 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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