Who is responsible for water in the basement?
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Who is responsible for water in the basement?
I recently bought a house that was flipped. I hadn’t lived there for two months
when there was water in the basement. The basement repairman said it was
clearly a pre-existing condition. Can I sue the previous owner, the contractor, for
not disclosing this problem in the purchase and sale agreement?
Asked on January 20, 2017 under Real Estate Law, Massachusetts
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
If the water in the basement was an undisclosed pre-existing condition, you can sue the previous owner 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 purchased the house had you known of the condition of the basement.
Fraud also applies in cases of nondisclosure by the seller where the buyer could not have reasonably discovered the true facts prior to purchase.
Your damages (monetary compensation you are seeking in your lawsuit for fraud) would be either the benefit of the bargain or your 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 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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