What if a seller lies on their disclosure form?

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What if a seller lies on their disclosure form?

We bought our house 6 weeks ago and now the roof is leaking. After looking at the inspection form and the owner’s disclosure, we found that the inspector’s missed the roof “soft spots” and the owner lied about roof leaks and repairs on the disclosure form. Do we have any recourse?

Asked on June 1, 2012 under Real Estate Law, Florida

Answers:

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

Answered 9 years ago | Contributor

You can file a lawsuit against the seller and inspector.  Your lawsuit would have separate causes of action (claims) for fraud and negligence.  Fraud would be the cause of action against the seller.  Negligence would be the cause of action against the inspector.

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 jusitifiably relied to your detriment.  In other words, the seller's misrepresentations induced your reliance and you justifiably relied to your detriment by purchasing the house based on the seller's misrepresentations about the roof. 

Your damages (the amount of 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 may recover the difference between the real and represented value of the property purchased regardless of the fact that your actual loss might have been less.

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

In your claim for negligence against the inspector, negligence is the failure to exercise due care (that degree of care that a reasonable home inspector would have exercised under the same or similar circumstances to prevent foreseeable harm).  Your damages for negligence would be the cost of repairs to the roof.  You will need to mitigate (minimize) damages by selecting a roofer whose charges are comparable to other roofers in the area.  If you were to select the most expensive roofer  you could find, you would have failed to mitigate damages and your damages would be reduced accordingly.


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