What if something was wrong with your house at the time of purchase and someone—the seller, the property seller's real estate agent, or the inspector—could have or should have told you about it, but didn't? Such problems can come to light days, weeks, or years after the sale, leaving you angry and wondering whether you really have to shoulder the entire financial burden.
In such cases, you might actually be able to ask the responsible person to pitch in, and take the matter to court if they don't. Ideally, you'll be able to resolve matters without filing a lawsuit suit. To give you a picture of what might be ahead, however, this article will analyze:
You probably knew when you bought the house that it wasn't in perfect condition. Some problems, such as a crack in the front walk, might have been obvious. Others, such as aging plumbing, the seller might have told you about in the course of the sale. (In most states, laws require home sellers to disclose all "material" defects to prospective buyers.)
Your home inspector, assuming you hired one, probably also told you about a few problems.
Then after the sale, your home probably continued its normal process of aging and decaying, leaving you to deal with the consequences. None of these sorts of issues provide any grounds upon which to run back to the seller to complain.
Will your insurance company cover the damage? If so, there might be no need to take action on your own. For how to gain coverage, see After the Fire or Disaster: Dealing with Your Insurance Company.
Even if you think you've been wronged, you can't sue everyone involved in the sale of your home. The home seller is the first one to consider, of course.
As mentioned, nearly every U.S. state has laws requiring sellers to advise buyers of certain defects in the property, typically by filling out a standard disclosure form before the sale is completed. (This responsibility remains even if you bought the house "as is.")
The form usually asks the seller to state whether the property has certain features (like appliances, a roof, a foundation, systems for electricity, water, and heating, and more) and then to rate or describe their condition. Some states' disclosure laws are more comprehensive than others, and if a feature isn't on the list, the seller might not be required to speak up. Also, the seller isn't usually required to scout out problems.
If there's clearly a place on the form where the seller should have stated a problem but denied it, your job is to try to figure out whether the seller in fact knew about it. For example, if the seller patched over or hid problem areas, or if the neighbors have told you about the seller's efforts to deal with a problem, the evidence is on your side.
And even if you're in one of the few states with no mandated seller disclosures, it might be possible, particularly in an egregious situation, to sue the seller for:
Some states' laws make sellers' real estate agents liable for failing to disclose problems they observed or were told of by the sellers, though often their duties are fairly limited. Check your state's disclosure laws and try to figure out whether the problem would have been apparent to the broker (who never lived in the home, so might know much less than the owner), but not to you, before the sale.
Hopefully, you got a home inspection report done before buying. In theory, the inspector should have spotted problems that the seller wasn't aware of or was turning a blind eye to. If the inspector missed problems that an expert (a professional peer) should have noticed, the inspector might be on the hook; that is, legally liable.
Read over your inspection report to see what it said about the area in question. Some buyers are embarrassed to find that the problem is spelled out right in the report, or falls within an area that the inspector rightfully excluded from the report (such as a blocked off or inaccessible area). But in other cases, the inspector failed to meet basic standards of professional competence.
Once you've figured out the possible responsible parties, you'll want to know whether their action—or inaction—might entitle you to compensation. If your situation meets the criteria below, you might have a good case. We've collapsed a few legal principles into this list, but it will apply to most situations in most U.S. states.
Even if you think you meet the above criteria, remember that in an actual lawsuit, it will be your job to convince a judge. Hence the more evidence you can start gathering, the better.
In legalese, you could potentially sue someone based on any of the following principles, or some combination of them:
Again, the law in your state will govern which theory might best fit your case, and you'll want to consult a lawyer.
Your main options for actually filing a lawsuit include:
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 typically not 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 50-State Chart of Small Claims Court Limits. 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.
If the amount of monetary damages you're asking for exceeds the small claims court limit by enough that you're not willing to forego the difference, 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 might still be responsible for paying court costs and other fees, plus expenses such as the attorney's phone calls and postage. Or, the court might award reimbursement of attorney's fees as part of your damages.