What to do if we feel that the prior homeowner and home inspector failed to provide information about water damage when we purchased our home?

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What to do if we feel that the prior homeowner and home inspector failed to provide information about water damage when we purchased our home?

The home inspector failed to check plumbing under our house before we purchased it. We also think previouse owner failed to disclose water damage. Now we have huge mold and water damamge that our insurance is very slow on helping us with our claim. It has been going on for 5 months.

Asked on May 16, 2012 under Real Estate Law, Texas

Answers:

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

Answered 8 years ago | Contributor

You can file one lawsuit in which you would sue the seller (previous owner) for fraud and the home inspector for negligence.  Fraud and negligence would be separate causes of action (claims) in your lawsuit.

Fraud is the intentional misrepresentation 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 relied on the seller's misrepresentations and would not have purchased the house had you known about the water damage.  Fraud also applies in cases where the seller failed to disclose a material fact which buyer could not have reasonably discovered.

Your damages (monetary compensation you are seeking in your lawsuit for fraud) would be either the benefit of the bargain or your out of pocket loss.

Benefit of the bargain means a defrauded purchaser can recover the difference between the real and represented value of the property purchased regardless of the fact that your actual loss may have been less.

Out of pocket damages for fraudulent misrepresentation permits recovery of the difference between the price paid and the actual value of the property acquired.

Negligence (your claim against the inspector) is the failure to exercise due care (that degree of care that in this case a reasonable home inspector would have exercised under the same or similar circumstances to prevent foreseeable harm).

In order to prove negligence, you will need to prove duty (of due care mentioned above), breach of duty (failure to exercise due care), actual cause, proximate cause and damages.

Actual cause means but for the inspector not inspecting the plumbing and/or discovering the water damage, would you have purchased the house?  If the answer is no, actual cause has been established.  Proximate cause means are there any unforeseeable, intervening acts which would relieve the inspector of liability?  If the answer is no, proximate cause has been established.  Damages means the amount of compensation you are seeking in your lawsuit.  Your damages for negligence would be the cost of repairs to the house for the water damage.  You will need to mitigate (minimize) damages by selecting someone to repair the damage whose fees are comparable to other home repair services in the area.  If you were to select the most expensive home repair service you could find, you would have failed to mitigate damages and your damages would be reduced accordingly.

In your lawsuit for negligence against the inspector, if the inspector is employed by some company, you want to name the company as a defendant in your lawsuit because an employer is liable for the negligence of an employee which occurred in the course and scope of employment.


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