is negligent misrepresentation present in this case?

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is negligent misrepresentation present in this case?

I purchased my home 4/14/16 from a seller who is also a real estate agent. We
discovered significant black mold growth and water damage in our basement on
6/25/16. The Seller’s Disclosure Report only listed that there had been a hole
drilled into the ground that caused water to leak into the basement, but it had
been properly mitigated and water diverted away from the house. After having
several companies come to give me estimates on the mitigating of the mold and
repair of any foundation/structural damage, two separate companies stated they
had been to the property before when it was vacant. They both said the
condition was so bad it needed to be gutted. One of the men told me that the
basement was covered in mold from floor to mid-wall and the main level had
flooded from water coming in from under the front door and mold was also very
present on that level. Our neighbors also informed us after we moved in that
the street had flooded last year and their home received water damage. They
called the owner of the property the seller to inform him that his property
most likely had also received flooding, and he didn’t show up for a week. None
of this information was disclosed to me by the seller. We also discovered on
7/18/16 that behind the insulation and drywall, there is about 8 or so inches
under the window that has no concrete and the exterior dirt from the window
well is exposed to the drywall. This is where the water was coming in from. I
feel there has been negligent misrepresentation of the condition of the home.
Any guidance you can provide will be much appreciated. Thank you.

Asked on July 26, 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 purchased the house had you known the true facts.
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 determination of damages for fraudulent misrepresentation permits recovery of the difference between the price paid and actual value of the property acquired.


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