Seller failed to disclose major leak into electrical box. Do I have any legal grounds to hold him liable?

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Seller failed to disclose major leak into electrical box. Do I have any legal grounds to hold him liable?

Closed on a house in KCMO on 6/1/2017. House has been peered for a leak in basement. Inspector noticed rust on breakers inside the box, recommended to replace entire box. Seller hired an electrician to correct problem. Seller told his electrician that this was a ten year old problem that had been rectified along time ago so just fix the few breakers that reflected rust, instead of entire box. I have pictures from two weeks 14 days after closing where I found water in basement. It was not until more recently that I finally figured where the water was coming from. It is leaking from the outside of the house, directly running into the breaker box. Went outside and took pictures. I can see where someone has used liquid nail to try to seal this leak. Called my agent. He stated bad luck for me. Purchased a home warranty with house, but they will not cover as it is water damage. Called another electrician to get an estimate. He stated that someone had to know this was a problem and tried to fix it with the liquid nail, but that will not work as that product will not stop water. Paid him to do his best with a temporary fix, but I feel the owner knew this was a problem and failed to disclose is closing paperwork. Even his electrician will speak on my behalf. Do I have a case? Should I take it to small claims?

Asked on August 24, 2017 under Real Estate Law, Missouri

Answers:

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

Answered 3 years ago | Contributor

You can sue the seller for fraud.  Fraud is the intentional misrepresentation or nondisclosure 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 bought the house had you known of the water leak / breaker box condition.
Your damages (monetary compensation you are seeking in your lawsuit for fraud) would be either 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 regardless of the fact that the actual loss suffered might have been less.
Out of pocket determination for fraudulent misrepresentation permits recovery of the difference between the price paid and the actual value of the property acquired.
It would be advisable to file your lawsuit in a higher court than small claims because your recovery of damages will be a lesser amount in small claims court which may be inadequate to compensate you.


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