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I purchased a home back in August 2015.
During the inspection I had pointed out 2
seperate areas of the ceiling that looked
patched asking the home owners what it was
from and also the inspector. Nobody came up
with anything. Just this month I had a pipe leak
through my ceiling and ruin my new floors in
my kitchen. Three licensed plumbers came out
and told me that my pipes are all corroded and
it’s in plain eye view inside all the wall in attics.
They also all asked if I had the house
inspected before buying it. I am being told that
all my pipes should be replaced and that the
corrosion did not happen in the last 8 months
of my ownership. My inspection report states
no visible signs of any corrosion to the house
plumbing. My question is do I have any
financial recourse with the previous owner, who
hid this problem? Or with the inspector missing
Asked on April 24, 2016 under Real Estate Law, Texas
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
You can sue the previous owner for fraud. You can sue the inspector for negligence.
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 bought the house had you known of the condition of the plumbing. 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 for fraud) would be either benefit of the bargain or 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 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.
Your lawsuit against the inspector would be for negligence. Negligence is the failure to exercise due care (that degree of care that a reasonable inspector would have exercised under the same or similar circumstances to prevent foreseeable harm). Your damages (monetary compensation) would be what was caused by the inspector's negligence.