Profile picture for JZM2

Is previous owner responsible for repair cost if they knew about an issue and did not disclose it?

We just purchased our first home a few months ago. The seller disclosed the house had foundation work about 15 years ago that included a 20-year warranty. When we were in the process of buying the house, our inspector confirmed the work but didn't make us aware of any additional issues. He noted that cracks in the wall were due to normal settling and very common in a house that is almost 100 years old. 

In the Sellers Disclosure, it was noted there was foundation repair done and that it was still under warranty, but did not mention the additional work needed that wasn't covered. Also the seller checked that they were unaware of any wood rot.

What should we do? We obviously need to do the repairs, only a few things the company can do are under warranty. The rest of the work to correct the problem from recurring, we would have to pay for. I don't feel that we should have to pay for it, especially when the previous owner knew about the problems, was quoted by the company to fix them, but decided not to.  

Is there any way the previous owner should be responsible for paying for those repairs? If so, how would we go about getting that resolved? 

  • November 19 2013 - Northeast Dallas
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Answers (9)

Profile picture for MicahHarper
Failure to Disclose is always a difficult thing to prove, but when you can prove it and you can prove that you were damaged by the failure to disclose, you can recover from the seller.  In this particular case, it seems like you have very good evidence that the seller was aware of a material defect that they did not disclose to you.  A Realtor cannot help you in this situation, you need a Real Estate Litigation attorney.  Not just someone who will write letters for you, someone who has gone to court on this issue before.  I'm a real estate attorney in San Antonio, if you need a referral to one up in Dallas I can assist you.

Another thing to consider is that, if you can prove that the listing agent was aware of the defect and did not disclose it, you may be able to recover from the Real Estate Recovery Trust Account:
http://www.trec.state.tx.us/pdf/faq/rerf-faq.pdf
  • November 20 2013
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I agree that you need to call a lawyer ASAP.

I represented some clients (buyers) about 17 years ago on a home in Irving and the seller said that they weren't aware of any foundation work on the disclosure.  We did the inspections and the issues came up but the buyers were willing to buy it because they were getting a great deal.

A few months after they moved in, they called a foundation repair company for a quote and it turned out that the same company gave a quote to the previous owners just a few months before they put the house on the market.

My clients felt that they were deceived, because they were lied to by the owners, and decided to pursue it legally.  They ended up in mediation and won the case.  It was a matter of principal for them and flagrant deception.

Call a real estate attorney and make sure the foundation company puts in writing what their recommendation was to the previous owners.

Good luck,

Naima
  • November 19 2013
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So the owner knew the repairs needed to be performed and didn't disclose the need for the repairs?  If this is the case, my advice is to consult an attorney ASAP as you may potentially have a case here against the previous owner.

  • November 19 2013
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Profile picture for wetdawgs
When one purchases a house, at closing one is basically accepting the house in the condition it is on that day.   Before you sign on the dotted line, you've had chances to  hire inspectors, look at every corner yourself and if you think you want to - hire yet another inspector.   

While a disclosure is a good starting point, don't count on the disclosure for full representation of reality because the average owner really doesn't know. Many contractors are willing to keep working until the bank is empty, so a contractor recommending something isn't always a good sign that someone knew there was an issue. There is a basic premise here that the previous owner knew of these conditions.   Proving that in court is incredibly difficult.  

Please call your attorney and review the problem with him/her.   Be careful, it is easy to spend more on the attorney than repairing the issue yourself.

  • November 19 2013
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It can be very frustrating when the home that you purchased needs more work than originally expected. However, you need to talk to an attorney that specializes in Real Estate to see what type of disclosure was required and if, in fact, the seller is at all responsible for the repairs.
  • November 19 2013
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Sorry for your hardship and I hope that you find a workable resolution. You are going to need an attorney, no simple way about it. If you feel that the previous homeowner deliberately failed to disclose a material defect, the only recourse is to get together all your purchase documents and take your case to an attorney who understands real estate law. The attorney can review your case and determine if there is any legal standing making it worthwhile for you to proceed with a legal case against the former homeowner. 

  • November 19 2013
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Profile picture for SteadyState
You need to consult a real estate attorney. The realtor may not be able to help in this situation.
  • November 19 2013
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Profile picture for JZM2
For some reason it won't allow me to edit my post and deleted a key paragraph I typed.

We just had the company who originally repaired the foundation come out to look at the house as we've noticed there has been additional settling. When they came out to do the inspection, they told us they were very familiar with our house. They had come out many times over the years, including several times with the previous owner. He said they had discussed additional work that needed to be done with the previous owner, but the owner had declined because it was not covered by the warranty. From what I understand, the house needs to be excavated on one side to be able to replace a beam that is rotting, and add a French drain to prevent further issues, as well as excavating the other side to add additional supports. This will cost a significant amount of money.

  • November 19 2013
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Talk with your Realtor and then talk with a Real Estate Attorney.
  • November 19 2013
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