Is the seller of our house liable for repair costs that we are incurring regarding water damage that they failed to disclose?

UPDATED: Sep 30, 2022

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Is the seller of our house liable for repair costs that we are incurring regarding water damage that they failed to disclose?

My husband and I closed on our house just over 2 months ago. We had a home

inspection which didn’t reveal any major flaws. Fast-forward to a month later. Our furnace went out and the house got down to 50 degrees. The inspection report stated that we would need a new furnace soon. The problem is, on the 21st, our kitchen floor buckled up. The floor was installed by the seller. As we were going out of town, we didn’t get to investigate for about a week. When we did, we pulled up the floor panels they are interlocking pieces to find that the floor beneath the most recent layer was bulging up. My husband cut through that layer of flooring, which was linoleum glued to 1/4′ plywood, and we found water damage to that floor. However, there is still another layer of flooring on top of the subfloor. We originally decided we would replace the wet floor with 1/4′ plywood and then reinstall the top layer of flooring. However, when we went to put the top layer back down, I discovered mold on approximately half of the floor panels we pulled out. My husband looked closer at the walls and there is some mold on the drywall, too. I want to know if it is worth the time and energy to even try to get the seller to help pay for this issue, or if there is even a case for it. I personally feel like they had to have known there was water damage to the middle layer of flooring, as it was still wet when we removed the top layer. Our real estate agent said to reach out to the seller first before going through a small claims court.

Asked on January 26, 2017 under Real Estate Law, Indiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Assuming the seller did not give you some sort of written warranty or guaranty (if they did, you could enforce its terms, like enforcing any other contract), they would only be liable if they committed fraud: that is, if they intentionally lied about (including by concealing) a known condition, which condition was not readily or reasonably detectable by you or your home inspector (i.e. it was a hidden or latent condition, and you were reliant on the seller to tell you). But you must be able to prove that they knew of the damage, or reasonably, *must* have known (i.e. any homeowner in their situation  reasonably or logically must have known). So you would have to be able to show that the flooring was wet or water damaged when they put the flooring layer down which they installed. If you can't show that, you are unlikely to win: since you'd be suing, you have to prove your case, so if you can't prove their knowledge of the condition, you would have failed to carry your burden of proof.

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