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I recently purchased a property as-is, cash earlier this year. The house was on the market prior as a foreclosure and was relisted as new with a remodel when I put in my offer. I have the previous listings photos of what the house looked like when the sellers obtained it, and then currently how they were selling it. At the time of inspection, there were some noticeable unleveled floors I was worried about being a foundation problem but I was told by the seller/sellers agent that the home was built on slab and had no crawlspace so I took their word. After purchasing and removing the new carpet they had installed we found a sealed up crawlspace opening and the hallways had plywood instead of original hardwood flooring like all the other rooms. Once we broke through the crawlspace opening we found a dirt floor crawlspace with no foundation walls and a very damaged and rotting pier and beam foundation. There was new plumbing work done below for the remodeled bathrooms they advertised. The foundation issue was there before we bought the property. I could not see the foundation issue before buying the property because it was not disclosed, and we asked the seller and sellers agent about the crawlspace/foundation and our concerns and they told us the home did not have a crawlspace and the listing has it as build on slab. We relied on these lies and non-disclosures when purchasing the property and are now incurring large montarey damages. Including talks of a demolish and rebuild because our contractors feel the current foundation is too damaged and dangerous for a repair.

Asked on July 19, 2017 under Real Estate Law, Illinois


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If you can show the following two things--
1) That they knew, or reasonably (logically) *must* have known of the true conditions, but knowing of it, lied to you; and
2) That you *reasonably* (or logially; without warning signs) relied on their lies, misrepresentations or non-disclosures in deciding to buy (in this context, failing to disclose a known material or significant condition is equivalent to lying about)
--you may be able to sue them for fraud, to recove compensation. You can, based on what you write, almost certainly prove 1); if they did extensive work to the home, especially any in the crawlspace, they would have known about this.
The issue for you is, based on what the home looked like after the remodel (e.g. was a slab visible? Or instead, was there space or an elevation which implied a crawlspace), given the unleveled floors which you were evidently aware of, and also given what you may have known from anything stated or shown in the prior listing (since you evidently saw that prior listing), was it reasonable for you to rely on the statement that the home was built on a slab? 
Based on what you write, it may not have been reasonable for you rely on that and not have any inspection done, such as by an engineer. The presence of uneven floors would you put on notice that there is something going on with the foundation; it would be reasonable to have an inspection done before buying. Conversely, the failure to do more "due diligence" in the face of such an obvious problem may be unreasonable; and if unreasonable, would prevent you from bringing a fraud case successfully (the law does not let people recover compensation when they themselves were unreasonable). 
You should speak in detail with an attorney, to see if you can successfully sue, but bear in mind that a failure to follow up on or investigate an obvious problem (the floors) could mean that you do not have any recourse and bought the home with its issues.

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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