Seller Didn’t Disclose Water Damage, Now What?

Seller didn’t disclose water damage, now what? These homeowners moved in and found themselves with flooded basements from cracks, leaks and clogged drains.

From time to time, we get a series of questions on the same topic. This week, everyone seems to have water on the brain. Literally.

We’re running some of the questions and comments we’ve received recently about seller disclosure issues relating specifically to water:

Seller Failed to Disclose Basement Leak

Q: We just bought a house in Pennsylvania. During the process of moving in, we found out there’s water leaking into the basement from a crack into the basement. This issue was never mentioned by our seller in the seller disclosure statement.

We did ask the seller about water leaks in the property and he only mentioned a leaky sink. Everything shows that our seller knew about the problem and has been dealing with floods from that crack for a while. We haven’t even moved into the home and we’re facing a problem that can be serious and expensive to fix.

We don’t know how to proceed. We took photos and made videos of the flood yesterday and sent them to our Realtor but we need all the help we can get.

How Do You Pursue a Seller Who Didn’t Disclose Water Damage

Q: I need a list of real estate attorneys that handle seller disclosure actions. I purchased a home and moved in a couple of months ago. There was a severe storm about a month after we closed and our basement flooded and the drains clogged.

On the seller disclosure statement that was provided to us about a month before our closing, the seller checked “No” when referring to any leaks, flooding or clogged drains in the basement. What do we do now?

A: Seller disclosure forms can be a bit opaque, and there are several essential things that buyers need to know about them when buying a home.

5 Things Home Buyers Should Know About Seller Disclosures

The first is that many sellers know very little about their homes. Even if they’ve lived in them for a long time, it’s very easy to simply call someone to handle mechanical issues in the house without ever really understanding what’s going on.

Second, buyers and sellers might view the house issues differently. The truth is, many sellers think their home is in better condition than a buyer would because they’ve lived in the house and know that what might appear to be a difficult problem really isn’t so bad at the end of the day. (This view, by the way, isn’t always accurate, but living in a home means you might become inured to the problem.)

Third, not all sellers are honest and some do cover up problems with their homes. We looked at a home years ago that had a basement that seemed too freshly painted. Sure enough, when we moved away some boxed stacked against a wall, that part of the wall hadn’t been painted and showed water damage.

Fourth, when sellers make repairs to their homes, they usually believe whatever problem they were dealing with has been permanently (as opposed to temporarily) fixed.

Finally, seller disclosure forms do not replace a buyer’s need to have the property inspected by an excellent professional home inspector, who knows what to look for to make sure the home is in good shape.

How to Deal with Undisclosed Water Leaks as a New Homeowner

In the first question, the buyers found a crack in the basement wall. In areas of the country where basements are common, you commonly find basement cracks. Over time, the soil around the home settles and this settling can result in a crack in the foundation and its walls. There are companies that specialize in basement repairs and not all basement repairs are budget breakers. But, some certainly can be. So the questions for this buyer to ponder are: Did you have the home inspected by a professional home inspector? Did the inspector find the crack? How big a crack is it? (Anything over ⅛” might be considered a “structural” crack.) And, was there any evidence of moisture infiltration?

The second buyer found that their basement drains were clogged and the result was water in the basement. Here again, we have to wonder whether the home was inspected and if the inspector raised these issues before the closing.

Water in basements is a common occurrence for many homes. And, with climate change increasing the frequency and amount of rain in some parts of the country, it is likely to be a bigger problem going forward.

There are both easy and more difficult solutions. Try the easy fixes first: Make sure that a home’s downspouts and grading push water away from the home. Make sure your gutters stay clear so water can easily move around. Be sure your grout is in good shape. More expensive fixes include installing drainage tile and sump pump pits to move the water from around the home before it gets into the home.

For these buyers and their seller disclosure issues, we don’t have enough information to know whether the sellers lied about the problem.

Litigation When a Seller Didn’t Disclose Water Damage

Sam has had buyers close on homes and shortly after the purchase, the neighborhoods in which they were located received a huge and historic rainfall that flooded most of the homes in the area. If the seller had never lived through a historic flood, they would not know that their home was susceptible to water in the basement and they would not need to disclose this.

Now, if the seller knew of the problem, and had hired someone to try and fix the issue, or consulted with an expert but failed to take the expert’s advice about repairing the problem, and the seller disclosure form required that the seller disclose this problem, the buyer may have a good case against the seller. But the buyer will need to determine the time and cost of suing the seller against the cost of making any required repairs to the home.

Remember, with seller disclosure litigation, the buyer will have to prove that the seller knew or should have known about the problem. It’s a high hurdle.

For our first reader, the seller might have known of the crack in the basement but didn’t think it was too “bad.” The seller’s assessment might be in error and this buyer may have the right to sue the seller. Again, the buyer needs to determine the cost of the crack repair and then determine whether suing the seller is worth it.

On the clogged drain question, Sam has had several clients move into a home and find issues they think the sellers should have known about. When one of Sam’s clients moved into his home years ago, the drains were also clogged but the sellers never knew. They were an older couple that didn’t use much water so the water they used could pass through. However, when Sam’s client moved in, the water usage was much greater and the sewer line backed up.

Bottom Line When a Seller Didn’t Disclose Water Damage

Here’s the bottom line: just because the seller signs a disclosure form doesn’t mean that it’s accurate. And, unless you have a high-cost claim and real proof that the seller knew about the problem, you might not be able to do much about it.

Lastly, many seller disclosure laws allow buyers to recover attorneys fees if they sue the seller. Fair enough. But if the cost to repair the home is $350, it’s unlikely that you’d hire an attorney and sue, unless you decide to do it yourself in small claims court.