What to do if the seller failed to disclose a 24k water damage claim on the property that we made an offer on?

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What to do if the seller failed to disclose a 24k water damage claim on the property that we made an offer on?

Our insurer will not insure the property. Can we cancel the contract and get earnest money back due to non-disclosure or uninsurability with our insurer?

Asked on January 2, 2013 under Real Estate Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If the seller knew of substantial damage which has not been entirely repaired or corrected and failed to disclose same, then the seller may have committed fraud; fraud can provide grounds to rescind a contract, in which case you could both escape it and get your earnest money back. (If the damage was fully repaired, and the condition which caused it has been completely remediated or corrected, this would most likely not be fraud--in that case, the condition, since it has been fully corrected, is not material, or significant.) You probably should let a lawyer help you with this, since making out a claim for fraud, if the seller refuses to voluntarily rescind the agreement, is not always easy.


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