The excitement of buying a home can be quickly crushed if you discover an undisclosed defect after moving in. Repairing the defect may, depending on its severity, be expensive and inconvenient. And then there’s that awful suspicion that the seller may have intentionally kept quiet about the problem. In Oregon, if the seller concealed or lied about the defect, legal remedies may be available to alleviate your financial burden.
Whether there is a legal remedy available to you will depend on a myriad of factors, such as:
Given the number of factors in play, every case against a home seller will be different. Since a home is a significant investment, and defects can be costly to cure, it may be prudent to promptly retain a real estate attorney to help you protect your rights.
You will want to act fast after realizing that your home came with a problem. Here are some important first steps.
If you’re lucky, the defect you discovered will be covered by your homeowners’ insurance policy or, if applicable, a home warranty. It is also possible, if the defect relates to an appliance, that the appliance manufacturer provides a warranty.
Making a claim to your insurance company won’t preclude from making a claim against the seller. If the insurance company accepts your claim, it may decide to sue the seller itself to recoup what it paid you. If the insurance company denies your claim, you still have the ability to pursue a claim against the seller.
Because strict timelines may apply to your insurance or warranty claim, be sure to comply with any notice or procedural requirements that apply. Additionally, since it may take time for the insurance or warranty company to process your request, it is important to make your claim promptly after discovering the problem. If there is any delay in the processing of your insurance or warranty claim, seek advice from your attorney.
It is important to promptly take steps to repair the defect -- at least repair to a point where it isn’t getting worse or causing other harm. Even if the defect doesn’t appear like it is, or will be, getting worse, it may be prudent to retain a contractor to confirm that additional damage will not occur.
If you fail to “mitigate your damage,” the seller may successfully argue that some (or even most) of the damage you sustained is your fault. For example, if the defect you initially discover is only a small leak causing a water spot on your ceiling, but you fail to promptly fix it, and the leak later causes mold, damages the attic, or ruins the ceiling completely, you may be on the hook for the additional damage.
Quickly retain a contractor to examine the extent of the damage and begin repairs. If the defect is covered by insurance or warranty, you may need to use a contractor selected by the insurance or warranty company. The seller, or some other culpable party, may be found responsible for your expenses and be ordered to reimburse you. However, you should not wait for that time. Even if no one is ultimately required to reimburse you, in most cases, it will benefit you to promptly address the defect.
If there is a chance that the seller lied about or concealed the defect, you should investigate further. To do so, you might start by:
Every case is different, so the available claims for relief will depend on the facts of your case. However, some of the common claims a homebuyer in Oregon might make include:
If you are successful in making a claim against your Oregon home seller, the available remedies may include reimbursement of repair expenses, other foreseeable expenses (such as the cost of a hotel room if it was necessary for you to live elsewhere during the repair work), attorney fees, and even punitive damages (to penalize the seller).
You may even be able to rescind the purchase by returning the property to the seller. Judges don’t often grant this remedy, but it may be worth pursuing if the defect can’t be remedied without significant expense. Rescission requires prompt notice to the seller of your intent to rescind.
What claims for relief and what remedy you seek are decisions you will need to make after receiving advice from your attorney. You may also have claims against the seller’s real estate agent, your real estate agent, or even your home inspector. Legal remedies against third parties are beyond the scope of this article.
Litigation is notoriously expensive. Small defects in a home may not warrant the expense and risk of filing a lawsuit. Even material defects warrant careful consideration of how best to proceed.
Here is a description of some of the different forums that may be available to you as you try to resolve your dispute:
The available claims, remedies, and forums to seek relief depend on the facts and circumstances of your case. Seeking legal advice promptly after discovering a defect will help assure you keep all options open.