What are the laws regarding a sellers non-disclosure of an unsafe condition and an on-going lawsuit?

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What are the laws regarding a sellers non-disclosure of an unsafe condition and an on-going lawsuit?

We bought a house 6 months ago and our water is terrible. We asked the neighbors about it and they said that the previous owners and them have a lawsuit against the city for contaminated water from the highway. Also, the house is 2 years old and we were told everything was new but the well is 15 or more years old. The previous owners were also the builders of the house. It’s going to be impossible to resale this house. What can we do?

Asked on April 20, 2011 under Real Estate Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You should consult with a real estate attorney because you may have legal recourse against them. Fraud is the knowing misrepresentation, or lying about, material (or important) facts; stating that the well was new when it was old may have been a misrepresentation. Fraud can also be in some cases the deliberate omission of material facts when there is a duty to disclose--and in this situation, sellers may have had a duty to disclose a lawsuit regarding contaminated water which they clearly knew of, since they were a party to it. In a situation like this, there is strong likelihood the sellers coommitted fraud.

If you have a cause of action for, say, fraud, then you could look to recover some or all of: 1) the dimunition in value--house as is vs. house as you thought you bought it; (2) cost to remediate--it may be possible to deal with situation (even if it's expensive), such as with connecting to town water, drilling a new well, and/or some kind of filtration; and/or (3) medical costs, if you or your family need any testing or treatment owing to contamination.


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