What are my rights if the sellers lied on the disclosure and the inspector didn’t catch issues with the chimney?

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What are my rights if the sellers lied on the disclosure and the inspector didn’t catch issues with the chimney?

I closed on my house on the 16th. The sellers disclosure said they had no issues with the chimney (no leaking, no work, never used it). Inspector gave it a satisfactory rating. He advised if we wanted to use it have it looked at and swept. Yesterday it was raining and we noticed water was dripping down the fireplace. We had a mason came out today. He said in fact recently work had been done. It is in such terrible shape we need to replace the whole brick chimney or have the outside covered with cement to stop it from leaking. What can I do/who can I go after?

Asked on December 28, 2011 under Real Estate Law, New Jersey

Answers:

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

Answered 9 years ago | Contributor

You could sue the 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 reliance upon which you justifiably relied to your detriment.  You would not have purchased the property if you had known the true condition of the chimney  Fraud also applies to cases of nondisclosure by the seller where the buyer could not have reasonably discovered the true facts as occurred in your case. with regard to the condition of the chimney.

Your damages (the amount you are seeking to recover 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 the actual loss suffered may have been less.

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

Your lawsuit for fraud would also include a separate cause of action (claim) for negligence against the inspector and the inspector's employer.  An employer is liable for the negligence of an employee which occurs during the course and scope of employment.  Negligence is the failure to exercise due care (that degree of care that in this case a reasonable 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 by not detecting the condition of the chimney), actual cause, proximate cause and damages.

Actual cause means but for the inspector not discovering the defective condition of the chimney would you have purchased the house?  If the answer is no, actual cause has been established.

Proximate cause means were there any unforeseeable, intervening events 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.

 

 


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