What to do if I purchased a home last month and within 3 weeks we discovered major blockage in the sewer line under the house causing the bathtub and toilet to overflow?

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What to do if I purchased a home last month and within 3 weeks we discovered major blockage in the sewer line under the house causing the bathtub and toilet to overflow?

This will result in a costly repair. I believe the sellers had to know about this and purposely did not disclose it. I know they knew about it because on the day we made the offer we saw the sellers in the grocery store purchasing drain opener. shame on me for not seeing that as a red flag. Any recourse against the sellers here or is it buyer beware?

Asked on August 25, 2015 under Real Estate Law, New Jersey

Answers:

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

Answered 6 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 by the seller also applies to nondisclosure of a material fact which the buyer could not have reasonably discovered.
In other words, you would not have purchased the property had you known about the sewer line blockage.
Your damages monetary compensation in a lawsuit for fraud would be either benefit of the bargain or 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 purchased regardless of the fact that the actual loss suffered might have been less.
Out of pocket  determination for fraudulent misrepresentations permits recovery of the difference between the price paid and actual value of the property acquired.


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