What can I sue for if I attempted to buy a house and was not told that it was in a flood zone and I am not being given my earnest money back?

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What can I sue for if I attempted to buy a house and was not told that it was in a flood zone and I am not being given my earnest money back?

I made an offer on a home and paid $500 and had the home inspected $300. It was found to have major defects and was in a known flood zone which requires flood insurance. I would not have made an offer if given the knowledge about the flood zone but that was kept from me. I legally backed out with that as an option in the conditions of the agreement that was never agreed on. Now, the seller is refusing to give me my earnest money back and I now have to sue to get that. I want to know what else I may sue for given the non-disclosure of this important factor?

Asked on January 23, 2012 under Real Estate Law, Indiana

Answers:

Joseph Gasparrini

Answered 9 years ago | Contributor

The general rule is that the seller of real estate is not required to disclose information of this type to a potential buyer.  However, if a seller made a false statement - falsely stating that the property is not in a flood zone - on a disclosure form or in some other signed document such as a binder agreement or contract, then such conduct by a seller may constitute willful misrepresentation or fraud.  That type of situation may givele the defrauded buyer the right to recover damages reimbursing him for expenses made in reliance on the false statement.  Mere non-disclosure of this type of information would not be sufficient to establish such rights.  However, you mentioned that you will sue the seller for failure to refund the earnest money deposit.  Since you are bringing legal action, you might as well ask the court for reimbursement of your other expenses that you mentioned.  It doesn't hurt to ask.  And it is always possible that the court may order the seller to reimburse you based on reasons other than those mentioned above.


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