What to do if our son bought a house several months ago and since moving in has discovered a severe water problem in basement?

UPDATED: Oct 2, 2022

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What to do if our son bought a house several months ago and since moving in has discovered a severe water problem in basement?

He had a home inspection done, entire basement had been newly painted. It was in the winter, so there had been no rain, ground was hard. Once spring arrived and we had a lot of rain, there is continual water seepage throughout the entire basement, through the walls, floors, etc. He is unable to use the basement for a play area for his 2 children because of the constant problem. Whenever it rains, there is water. Is there anything that can be done against the previous owners since its obvious now they did what they had to do to cover the water problem up? He is a single dad with limited income. Also, the inspection did not disclose any problem because it was winter, no rain, ground was hard, therefore no water seepage.

Asked on August 18, 2019 under Real Estate Law, Michigan


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

Answered 3 years ago | Contributor

Your son can sue the seller for fraud. Fraud is the intentional misrepresentation or nondisclosure of a material fact made with knowledge of its falsity and with the intent to induce your son's reliance upon which your son justifiably relied to his detriment.
In other words, your son would not have bought the house had he known of the flooding.
Damages (monetary compensation in a lawsuit) for fraud would be either the 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 regardless of the fact that actual loss suffered might have been less.
Out of pocket determination of damages for fraudulent misrepresentation permits recovery of the difference between the price paid and actual value of the property acquired.

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