How do I resolve a water intrusion problem that wasn’t disclosed by the seller before closing?

UPDATED: Sep 30, 2022

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How do I resolve a water intrusion problem that wasn’t disclosed by the seller before closing?

I closed on a house last month. I had the home inspector to inspect the home and he was told how important having a safe home was to my family. Our agent sent him a email stating to inspect all the walls in the basement and electrical and plumbing and make the proper

requirements for repairs if needed. A day after closing it rain and there was water trickling down the walls in the basement. The sellers were notified by their agent that they didn’t disclosed the leakage and they denied knowing it leaked. They owned this house for 8 years and when you open the laundry area the walls are the first thing you see. Who is responsible for the repair?

Asked on May 5, 2016 under Real Estate Law, North Carolina


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

Answered 6 years ago | Contributor

You can 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.  In other words, you would not have purchased the house had you known of the water leak.
Fraud is also applicable in cases of nondisclosure where the buyer could not have reasonably discovered the true facts prior to purchase.
Your damages (monetary compensation) in your lawsuit for fraud would be either benefit of the bargain or your out of pocket loss.
Benefit of the bargain allows a defrauded purchaser to recover the difference between the real and represented value of the property purchased regardless of the fact that the actual loss suffered might 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.
The seller is liable for the repairs based on either benefit of the bargain or out of pocket loss as discussed above.
The home inspector may also be liable for negligence for not discovering water damage during the inspection.  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).

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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