Is a seller liable for failure to disclose water copper line blockage due to a 20 year old basement renovation?

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Is a seller liable for failure to disclose water copper line blockage due to a 20 year old basement renovation?

We just bought our home in July 2016. The sellers did not disclose that the copper lines that dispense water from their fridge were not working due to the valves being completely sealed off from basement renovations. A permit for this revealed that the finishing of the basement took place in 1996. The fridge in the kitchen has a door water dispenser as a feature, so at first glance it appears that the fridge is able to dispense water. The home inspection report shows ‘the fridge appears to be in working order.’ When we discovered the lines were not working, a plumber was called out and reported that the valves were completely blocked off by the drywall placed to finish the basement. He had to cut through the drywall and the ceiling to create the access to the lines and reroute the copper lines. This cost us 1800. My concern is, based on being the homeowners for over 20 years, logic would say that this situation of not being able to use the dispenser because of the water lines at some point was brought to light, yet nothing was said. Are they liable? And since we already closed on the house and my husband feels like we own the money pit due to more plumbing, air/heat concerns, can we do anything about it?

Asked on August 13, 2016 under Real Estate Law, Colorado

Answers:

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

Answered 4 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 bought the house had you known of the water line blockage.
Fraud is also applicable in cases of nondisclosure of a material fact which the buyer could not have reasonably discovered prior to purchase.
Your damages (monetary compensation) in a lawsuit for fraud against the seller would be either the benefit of the bargain or your 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 misrepresentation  permits recovery of the difference between the price paid and the actual value of the property acquired.


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