Home Defects: Things to Try Before Filing a Lawsuit

(Page 2 of 2 of Home Defects: Sue the Seller?)

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If, after reading the information above, you think you have a good legal claim against your home seller, selling agent, or inspector, don't rush to court quite yet. You may be able to recover what you're owed more cheaply and with less stress by using one or both of the following options:

  • Demand letter. Send a demand letter to the responsible party asking for the costs to repair the defect. For a sample letter, see Nolo's article Demand Letters: The Basics.
  • Mediation. Tell the responsible party about the problem and -- assuming they don't agree to compensate you or fix the problem right away -- ask if they would agree to go to mediation with you. For more information, see Nolo's article Why Consider Mediation?

Last Resort: Filing a Lawsuit

If you aren't able to resolve your dispute with one of the methods above, you'll have to decide whether to file a lawsuit. If the problem will cost less to repair yourself than to pursue in court, you might as well chalk this one up to experience. If not, however, you shouldn't have to pay for someone's outright lies or shoddy work.

In legalese, you could potentially sue someone based on any of the following, or some combination of them:

  • failure to disclose (according to your state's statute)
  • negligence
  • fraud
  • breach of contract
  • breach of warranty, or
  • negligent misrepresentation.

Here's how to take the first steps to filing a lawsuit:

  • Make sure you're within any appropriate deadlines ("statutes of limitation"). Every state puts limits on how long you have, from the date you discover a problem or reasonably should have discovered it, to sue someone. They don't want you dragging the seller into court 20 years after the sale, when no one recalls what happened. Most statutes of limitations are somewhere between two and ten years, but it will depend on where you are and what type of claim you have. Find your state's laws on this with either an online search, by contacting your state's housing regulatory agency, or by consulting an attorney.
  • Consider small claims court. Filing in small claims court allows you to proceed with your case without a lot of the expensive administrative hassles of a "regular" lawsuit. You can represent yourself (in some states, attorneys are actually forbidden), the rules are not usually as rigid, and your case should be resolved relatively quickly. However, every state places a dollar limit on the amount of damages you can sue for -- usually somewhere between $1,500 and $15,000. To find your state's exact limit, see Nolo's article How Much Can I Sue for in Small Claims Court? Even if your damages are over the limit -- for example, if the repairs cost $8,000 and the limit is $5,000 -- bringing a suit for $5,000 and forgetting about the rest might make economic sense because you will save time and attorney's fees.
  • Decide whether to bring suit in state court. If the amount of money damages you're asking for exceeds the small claims court limit, your next option is filing suit in state court, most likely with the help of an attorney. Some attorneys will take this type of case on a contingency basis, meaning you don't pay a fee upfront but pay a large percentage (30-40%) of the damage award. You may still be responsible for paying court costs and other fees, plus expenses such as the attorney's phone calls and postage. Or, the court may award reimbursement of attorney's fees as part of your damages.

More Information

For more information on home defects and nondisclosure of problems, see Essential Guide for First-Time Homeowners: Maximize Your Investment & Enjoy Your New Home, by Ilona Bray and Alayna Schroeder (Nolo).

For more information on filing a claim in small claims court or representing yourself in state court, see Everybody's Guide to Small Claims Court, by Ralph Warner (Nolo) or Represent Yourself in Court: How to Prepare & Try a Winning Case, by Paul Bergman and Sara J. Berman (Nolo).

Or, if you need the help of a lawyer, check out Nolo's Lawyer Directory.

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