Any recourse after buying home that has hidden issues ?

21 Replies

We recently bought a home that has foundation issues, the seller is a builder/ contractor and used paint to hide issues. After basement flooding, we had to get waterproofed. Lots of other issues now coming up after living here a month. Home inspector didn't find any issues before we purchased. Wonder if there is any recourse or way to go after the seller and get some money back. Any advice is helpful, thank you.

Brian.

Did they fill out a home disclosure form when they sold you the property?

@Antoine Martel ,

The burden to prove they knew about issues and did not disclose, is on you now. It is not just was there a problem, it is was there a problem and did they know about it. One of their best defenses is going to be "They sent in a home inspector and they didn't see it. They are a professional at this how was I supposed to know". For the most part it is buyer beware which is why you need to do your due diligence.

Good luck and I hope it works out for you

They sure did, he said nothing is wrong with anything...Everdry and others who gave us quotes said this is obviously an existing problem he tried covering it up with waterproof paint. Thanks!

Originally posted by @Mike Cumbie :

@Antoine Martel,

The burden to prove they knew about issues and did not disclose, is on you now. It is not just was there a problem, it is was there a problem and did they know about it. One of their best defenses is going to be "They sent in a home inspector and they didn't see it. They are a professional at this how was I supposed to know". For the most part it is buyer beware which is why you need to do your due diligence.

Good luck and I hope it works out for you

 True.

Your word against theirs. 

@Brian Frazier I think the only recourse you have would be proof that they hid the defects. How long did the previous owner have the house and was it a live in home or a rehab and sale? If rehab and sale, and owned a short period of time, it's completely possible they had no idea there were issues, paid the painter to paint something, and after some time the issue came about.

I had a house I bought in Nov. all winter it had no issues. I ended up seeing behind the oil tank in the corner there was some cat litter. After cleaning that out, and spring thaw, I found there was water getting in (I never would have noticed had I not completely painted the basement floor and walls, and some flippers don't). I ended up digging outside, sealing, grading the ground/mulch and extending the downspout another 4-5'. This cured the issue... however had I not caught it I could see a buyer thinking I covered up the mess. Had I sold and closed before a spring thaw and rain, I might not even have seen the water getting in.

Not much you can do , you had an inspection .  

Hi Brian,

Some great points were made here.  If the seller gave you any receipts for repairs I suggest you call those contractors and ask if they informed the seller of other issues.  Sometimes they tell the seller who opts to ignore it.  But once the seller is informed, they typically have a duty to disclose.    It is possible they had no knowledge of course.   That happens too.  The seller's disclosure notice is just that--a disclosure of things the seller knows.  If he doesn't know it, he has no duty to disclose it.  But if a contractor told him of an issue, that must be disclosed.  Sorry you are in that situation. Good luck.

Thanks Brian, and I understand/ agree with you. He is a flipper, however there are many other issues now coming up and obvious that many short cuts. These seem purposeful. Thank You

@Brian Frazier If your laws are similar to ours here in MA - and I have no idea of they are - and the seller filled out a form like what we call the "seller's statement of property condition", they could be on the hook if they failed to disclose that sort of thing.

Failing that, it's going to depend on whether your state is a caveat emptor state or not.  If it is, you're going to be in tough shape.  

You should also look at your state's consumer protection laws.  There may be an "implied warranty of merchantability" or an action based on "fitness for a particular purpose".

You could also threaten to go nuclear on social media, but if you do, you had better be very accurate in what you say.  Defending a libel suit can be unpleasant.

But before doing any of that, talk with the seller and give him a chance to make it right - and get as much of your interactions in email as you can so you have a paper trail.

If that talk doesn't work out, it's probably worth spending a little on an hour with a real estate attorney.

Like Charlie said, your best bet is to talk to an Attorney. If the problem was really obvious before being disguised, you may have a case against the owner.  

Or you may have a case against the Inspector if your inspector was negligent and you can show that a reasonable inspector, in his or her place, would have discovered the defects in the home.


Talk to an attorney, there are things you can do. If it was a material defect and they knew about it you may have grounds for compensation.  You can not only ask the contractor who performed the work for the records, but offer to buy them. Funny how that works. Bottom line depends on the state where you bought it.

@Brian Frazier

Proving that they seller KNEW is the hard part.  A friend of mine bought a house with a septic system.  After settlement but before they moved in there was a septic problem.  The seller and the seller's agent both proclaimed they knew nothing (Sgt. Schultz style).   The buyer called a septic company to come out and fix the problem.  It was diagnosed as needing a new $20,000 septic, and oh by the way "we were out here last year and told the seller the same thing."  The seller's still refused to pay up and it went to court and they ended up paying $50,000, and the court said their claim of not knowing about the problem was "not credible."  (Which court talk for you're a big fat liar!)

@Brian Frazier

Thats a great story.  It seems like things never work out like that in real life.

If you plan for the majority of the unknown when making your offer, you should get it at a price that leaves little room for regret.  With that said, some properties tend to just end up tougher than expected.

@Brian Frazier there is a house down the road from me at the bottom of a hill and it has flooded multiple times. The home keeps changing hands. I was talking with a city engineer and asked him how it is that people keep buying that home and nothing is being done to fix the problem. He told me that each time it sells, nobody is disclosing the issues. This is despite my state having disclosure requirements. The truth is people hide problems. The burden of proof is on you to prove it was a cover up.

I would talk to neighbors and see if any of them are aware of a previous owner having issues. They may have seen carpet in the drive way after a heavy rain or maybe the owner told them they were having problems.

Some home inspection companies will warranty their inspection. Read your paperwork carefully, because there may be a way to place a claim with them. I would have my attorney send them a bill and request reimbursement. See how they respond.

It is possible to seek damages from the previous owner for problems not disclosed. Most purchase contracts for real estate have some agreement that the parties will go to mediation. I would have my agent contact the sellers agent and notify them you are looking for reimbursement. I did this one time for a cat pee odor that the seller was covering up. They ended up agreeing to paying 25% of the carpet cost. Not great, but better than nothing and we avoided court.

Ultimately as others have said, the burden of proof is yours. You can push this to court but keep in mind that your costs will increase. If you have a strong case with evidence of cover up, then you may win, but if you lose, you are out more money. 

Disclosure is a HUGE issue.  It is a puzzle you will have to put together for a judge (if going to court).  One piece will be the Seller Disclosures that they sent you regarding the property.  If nothing was mentioned, there is your first piece.  

The contractors, unrelated to the sale, that testify that this was an existing condition that was covered up with paint is yet another piece of the puzzle.

The fact that this Seller is a contractor gives him assumed knowledge that he should have regarding these types of items.  Another piece.

If you get enough pieces of this puzzle for a judge to make out the picture, it will most likely lean in your favor.

Get all of your pieces together and contact a RE attorney to evaluate.  It may be enough to have your attorney send a demand letter for payment of the resolution to these items.  If he knows he is guilty, he will not want to go to court and face a judge as there may be more at stake for him there (fraud charges).

Best of luck to you!

If they were flipping the house, and there was not a heavy rain during the short time they owned it, there is a good chance they did not actually know about the problem. This is one of the more common problems I see in flipped properties, as the issue simply doesnt arise until there are heavy rains.

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