What are my rights if the seller of the house that I just purchased did not disclose mold and water leaks?

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What are my rights if the seller of the house that I just purchased did not disclose mold and water leaks?

I purchased my home a year ago ( one of eight houses for sale) and within the past year five houses have had the back wall ripped out and replaced. Two weeks ago I discovered the reason… I found mold in a closet and the person I called to clean up the mold opened the wall and discovered that water leaks in through the back wall. He also noticed that repairs had been made on the wall. I think the sellers knew and covered it up. There was a stain in the ceiling of one of the bedrooms and when I asked about it they said they would have someone fix the roof. They painted over the stain and have me a paper that said the roof had been fixed. A roofer said I need a new roof. Insurance won’t cover. Can I sue?

Asked on September 5, 2012 under Real Estate Law, Pennsylvania

Answers:

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

Answered 9 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 about the mold and water leaks. 

Fraud is also applicable in cases of nondisclosure by a seller of a material fact which the buyer could not have reasonably discovered.

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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