Do I have a case against the bank for not disclosing major issues about a foreclosure?
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Do I have a case against the bank for not disclosing major issues about a foreclosure?
I bought a foreclosed home via auction without being allowed to see the inside until I took possession. There were pictures of the inside online, except for the basement. One of the exterior basement walls has moved and there is a hole in an interior basement wall where I can see that the main beam suporting the home has broken, and someone has placed a jack underneath it. So, major structural and foundation issues which the bank obviously had knowledge of. This is a vacant home I bought with the intent of fixing it up and renting it out. Do I have a legal case against the bank that owned it, as they did not disclose it? If not, should I just sell for whatever I can, even if its a huge loss and just consider it an expensive lesson learned?
Asked on August 18, 2018 under Real Estate Law, Ohio
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
You can sue the bank 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 reliance upon which you justifiably relied to your detriment.
In other words, you would not have bought the house had you known of the foundation and structural issues.
Your damages (monetary compensation you are seeking in a 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 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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