Can I sue the seller or finance people for not disclosing information on the sellers house having a lien?
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Can I sue the seller or finance people for not disclosing information on the sellers house having a lien?
My wife and I were recently buying a house
that was contingent on us selling our house.
All was well and got a buyer for our house
and had appointments set up to close on both
houses back to back, however, 3 hours prior
to the closings we were informed by our
financial lady that the house we were buying
had a lien attached to it and we were going
to be unable to purchase the home. I would
like to sue for moving costs and appraisals
fees and everything associated with
purchasing a house plus for all of our pain
and suffering with all the inconvenience.
Asked on July 26, 2016 under Real Estate Law, Alabama
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
You can sue based on fraud IF the seller knew about the lien: if he or she knew but failed to disclose such a material (important) fact, that is fraud, and fraud will provide a basis to collect compensation. (Note: there is generally no compensation for "pain and suffering" in cases like this--the law doesn't compensate you for your time, frustration, emotional upset, etc. You can get compensation for actual losses, like moving costs, expenses spent on the purchase, costs to rent somewhere else if you now have to, etc.)
But the seller's liability is dependent on their knowledge: if they did not know about the lien, which is possible if, for example, they were sued by someone and the lawyer filed a lien against them but failed to provide them good notice, or if a contractor filed a lien for lack of payment without providing proper notice, they would not be liable, since without knowledge, they did not lie and did nothing wrong. (It is also possible if, as rarely but occasionally does happen, the lien was recorded in error against them--i.e. there should be no lien, which is why did not know of one, but somewhere, someone made a mistake and recorded a lien vs. their home.) So if they can show that they did not in fact know of the lien, they would not be responsible for your costs, etc.
If you did a title search or purchased title insurance and the title company failed to find the lien, you may also be able to sue them for their negligence, or carelessness.
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