Is it legal for sellers to sell a home that has cracks throughout the foundation which were covered with paint and not inform the buyers?

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Is it legal for sellers to sell a home that has cracks throughout the foundation which were covered with paint and not inform the buyers?

We purchased a home, had a home inspection and at that time there we novisible cracks in the walls, ceilings, etc. Now that we are in the home for about 40 days we have noticed cracks coming from everywhere. As we look closer into the paint we can see where the cracks have been painted over. The seller did not inform us of the cracks before we purchased the home.

Asked on January 15, 2012 under Real Estate Law, District of Columbia

Answers:

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

Answered 10 years ago | Contributor

The seller has a duty to disclose to the buyer what the buyer could not have reasonably discovered.  You could not have reasonably discovered the cracks in the foundation  which were covered with paint and not visible during a home inspection.

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 if you had known about the cracks in the foundation.

Fraud also applies to nondisclosure where the seller had a duty to disclose where buyer could not have reasonably discovered the true facts.

Your damages (the amount of compensation you are seeking in a lawsuit for fraud against the seller of the house) would be either the benefit of the bargain or your out of pocket loss.

Benefit of the bargain means the 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 loss for fraudulent misrepresentations permits recovery of the difference between the price paid and the actual value of the property acquired.


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