UPDATED: Oct 14, 2019
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My son just bought house and moved in when we discovered fire damage. The seller was the owner and flipped the house without disclosing the damage. What can he do?
Asked on October 14, 2019 under Real Estate Law, Missouri
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 3 years ago | Contributor
Your son can sue the seller 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 son's reliance upon which he justifiably relied to his detriment.
In other words, your son would not have bought the house had he known of the fire damage.
Your son's damages (monetary compensation he is seeking in a lawsuit) for fraud would be either 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 regardless of the fact that 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 actual value of the property acquired.
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