What can we do if we have found substantial problems with leaks on all 3 floors of a home we purchased that have clearly been ongoing?

UPDATED: Sep 30, 2022

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What can we do if we have found substantial problems with leaks on all 3 floors of a home we purchased that have clearly been ongoing?

We’ve now lived in the home for 3 years and the problems surfaced about 3 months after purchase when the rains started. We’ve been tackling the issues 1 by 1 but the latest one is quite shocking. We received quotes for over $200K to do the repairs. The former owners of the home “sold” it to an organization (it’s not clear the relationship, although there was likely an economic interest for the former owners), which in turn sold the home to us. The organization never lived in the home but the former owners did for a number of years. Can we sue either party (or both) for nondisclosure?

Asked on December 24, 2015 under Real Estate Law, California


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

Answered 7 years ago | Contributor

You can sue the former owners and the organization 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 bought the house had you known of the leaks.
Fraud is also applicable in cases of nondisclosure where seller does not disclose a material fact which the buyer could not have reasonably discovered prior to purchase.
Your damages (monetary compensation) 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 represented value of the property purchased regardless of the fact that the actual loss suffered might have been less.
Out of pocket determination for damages for fraudulent misrepresentation permits recovery of the difference between the price paid and actual value of the property acquired.
Your lawsuit must be filed prior to the expiration of the applicable statute of limitations or you will lose your rights forever in the matter.

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