What is the precious owner’s responsibility if my son bought a duplex and there are problems that were not disclosed?

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What is the precious owner’s responsibility if my son bought a duplex and there are problems that were not disclosed?

The most costly one is that the shower backs up in the toilet and there is raw sewerage on both sides. The tenant on the other side expressed that this has been a problem for about 3 years. We had the septic tank pumped. We haven’t attempted to use the shower because there were rust spots in the tub and on drain. Our thoughts were to replace the tub, toilet and sink. We had the rust spots removed and decided to wait to do the remodel.

Asked on June 28, 2015 under Real Estate Law, Alaska

Answers:

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

Answered 6 years ago | Contributor

Your son should sue the previous owner (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 son's reliance upon which he justifiably relied to his detriment.  Fraud also includes the nondisclosure of a material fact (shower/sewage problem).  The seller's nondisclosure of the shower/sewage issue, which existed for years according to the neighbor, constitutes fraud.

In other words, your son would not have purchased the duplex had he known of the shower/sewage problem.

Your son's damages (monetary  compensation) in a lawsuit for fraud would be either the benefit of the bargain or out of pocket loss.

Benefit of the bargain means that a defrauded purchaser can 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 means that the damages (compensation) for fraud would be the difference between the price paid and the actual value of the property acquired.


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