If I bought my house 1.5 years ago and a basement water problem was not disclosed at that time, can I sue the seller for damages?
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If I bought my house 1.5 years ago and a basement water problem was not disclosed at that time, can I sue the seller for damages?
The basement flooded last week. When I brought a water mitigation team in, they discovered mold and plastic hiding previous water damage. If the previous owner knew that the basement flooded (as it appears that it did flood regularly), can I bring suit?
Asked on January 22, 2016 under Real Estate Law, Michigan
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
You can sue the seller (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 bought the house had you known of the basement flooding.
Fraud is also applicable in cases of nondisclosure by the seller where the purchaser 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 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 regardless of the fact that the actual loss suffered might have been less.
Out of pocket 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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