If we entered into a contract to buy a home thathas beencondemned by the city, what are our options?

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If we entered into a contract to buy a home thathas beencondemned by the city, what are our options?

 We were never told about this.

Asked on December 15, 2010 under Real Estate Law, Texas

Answers:

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

Answered 10 years ago | Contributor

If the seller knew the house had been condemned and did not disclose this to you, you could 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 reliance on which you justifiably relied to your detriment.  In this case, fraud would be the nondisclosure of a material fact (that the house had been condemned) with the intent to induce your reliance on which you justifiably relied to your detriment by entering into the contract to purchase the house.  Your damages (the amount you are seeking in your lawsuit) would be your out-of-pocket loss ( the amount you had paid to purchase the home).

You should seek rescission of the contract and restitution of the amount you had paid.  Rescission and restitution would be appropriate if the seller did not know the house had been condemned when you signed the contract to purchase the house.

If the seller did not know the house had been condemned and tries to enforce the contract against you, you should assert frustation of purpose, and impossibility as your defenses to enforcement of the contract.  Frustation of purpose in this context means that the value of the contract has been destroyed because the house has been condemned.  Impossibility means that you cannot perform your obligations under the contract to purchase the house because the house has been condemned. 

 

 


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