What to do if I purchased a house and the seller didn’t disclose a problem with the septic tank?

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What to do if I purchased a house and the seller didn’t disclose a problem with the septic tank?

Now the whole septic system has to be replaced and the cost will be around 10,000. Can I sue the seller for not disclosing this?

Asked on October 30, 2012 under Real Estate Law, Georgia

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.  In other words, you would not have purchased the house had you known of the expensive problem with the septic system needing to be replaced.

Fraud also applies in cases of non-disclosure where the seller did not disclose a material fact which the buyer could not have reasonably discovered prior to purchasing the property.  You could not have discovered the problem with the septic system without the seller disclosing it. Therefore, seller had a duty to disclose.

Your damages (monetary compensation you are seeking in your 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 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 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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