What to do if I just purchased a home and recieved a letter from the insurer saying that they are cancelling my policy because they found a sink hole claim from 10 years ago?
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What to do if I just purchased a home and recieved a letter from the insurer saying that they are cancelling my policy because they found a sink hole claim from 10 years ago?
The seller signed a sinkhole disclosure form stating that there were no sinkholes. Now my new insurance policy is triple the price and the value of my home has substantially decreased. Do I have legal grounds to pursue damages?
Asked on January 10, 2013 under Real Estate Law, Florida
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
You can sue the seller for fraud. Fraud is the intentional misrepreentation 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 purchased the house had you known the facts about the sinkhole.
Fraud also applies in cases of nondisclosure of a material fact by the seller which the buyer could not have reasonably discovered.
Your damages (monetary compensation you are seeking in a lawsuit for fraud) against the seller 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 of damages for fraudulent misrepresentation permits recovery of the difference between the price paid and the actual value of the property acquired.
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