What is a seller’s obligation for failure to disclose as pre-existing condition?
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What is a seller’s obligation for failure to disclose as pre-existing condition?
I purchased a home 15 months ago. I realized that there was a water damage in this home. On 2 occasions, the water got into my garage. However, the previous owner did not disclose this damage. Is there any action that I can take at this time? If there is, what are the possible award from the court?
Asked on September 27, 2011 under Real Estate Law, New Jersey
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The seller has a duty to disclose what a buyer could not have reasonably discovered. You said that you realized there was water damage in the home. If you were aware of it when you purchased the home, then you would not have any recourse against the seller.
If you were unaware of the water damage when you purchased the home, you could sue the buyer for fraud. Fraud is the misrepresentation or nondisclosure of a material fact made with the intent to induce reliance upon which you justifiably relied to your detriment by purchasing the home.
The compensation you could recover in a lawsuit for fraud would be either the benefit of the bargain or your out of pocket loss.
Benefit of the bargain means that a defrauded purchaser may recover the difference between the real and the represented value of the property purchased regardless of the fact that the actual loss suffered might have been less.
Out of pocket loss for fraudulent misrepresentation permits recovery of the difference between the price paid and the actual value of the property acquired.
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