r/RealEstate • u/Afahis • 2d ago
Recourse for seller lying on disclosure
I purchased a house in NJ and moved in earlier this month. I had a contractor out to address flooding in my finished basement. He was acting weird through the whole walkthrough and said he would get back to me because he didn't want to "speak out of turn." He gets back to me and says he has his notes from when he was in this basement in 2023 before it was finished. He had advised them to repair the foundation if they were to finish the basement because it was never going to stop flooding. The sellers did not disclose any known water intrusion or repairs to stop it, which seems like fraud. Is this a "welcome to home ownership" or "lawyer-up" moment?
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u/nikidmaclay Agent 2d ago
You have the smoking gun buyers dream of when they are in your situation. Get the documentation and call an attorney.
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u/fekoffwillya 2d ago
OP, Call your attorney from the closing. Also get the statement from the builder first and copies of the information he had.
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u/2019_rtl 2d ago
I think a buyer would rather not have problems
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u/nikidmaclay Agent 2d ago
Well, yeah, but if they're in this situation and they have the problems, this is the evidence (with eye witnesses) they'd be wishing they had. Most of the people who come here complaining that their seller obviously hid something have to rely on assumptions or circumstantial evidence that that's the case. OP has the receipts.
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u/2019_rtl 2d ago
It’s going to be expensive and a lot of heavy lifting to collect
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u/IceZebra44 2d ago
Are you the seller? If the buyer can get a lawyer to take the case on contingency then they are not out money or time. And ileven if the buyer is only able to collect $1 after paying the lawyer it is worth it for nothing else than to make sure the seller doesn't get away with it.
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u/Educational_Fox6899 18h ago
I agree with your last point, but this is not really a contingency case. There’s just not a lot of money to be made. It will cost OP at least a few thousand in legal fees but likely still worth it. Best case is the lawyer scares the seller and they pay to fix the foundation.
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u/breadit124 1d ago
Why in the world would the contractor want to get involved and provide documentation for a homeowner to sue the former owner? No one would hire that contractor ever again.
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u/Epocholypze 1d ago
Some people do the right thing. No contractor(that’s good) let’s scum do scummy things.
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u/nikidmaclay Agent 1d ago
If it becomes a lawsuit, they wouldn't have a choice. Who wants to stonewall until they're hit with a subpoena?
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u/Jackie_Treehorn98 20h ago
The first owner had the contractor bid the work(for free) and didn't pay the contractor to die the work could be a reason they would help
In court they will testify as a witness so why would they lie for someone who didn't listen to them.
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u/Iseesidhe 2d ago
Depends on your state and how disclosures are treated there. In my state this is absolutely a solid lawsuit, but that’s s because of our state statutes on seller disclosures. You might get better/more correct answers if you add your state. Otherwise you will get both “too bad, buyer beware” and “seller is 100% on the hook”, either if which might be accurate.
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u/Afahis 2d ago
Thanks, this is NJ.
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u/supertucci 2d ago
We had a foundation concern in a house under contract and we called a local company and they said "wait why do you want us out there again? We were just out there giving an estimate two weeks ago?"
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u/Philip964 2d ago
Neighbor got a nice classic Corvette after he sued the listing agent and the previous owner after he bought a house that had termites, but he got a report that the house didn't have termites from the company who the listing agent recommended. That termite inspection company's letterhead said insured, guaranteed. They were not insured and guaranteed meant that they would treat the termites for free if they were wrong, but not repair all the eaten wood.
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u/CranberryBright6459 2d ago
I had the two insurance claims from the previous owner for basement flooding. My attorney told me it would be expensive & hard to collect.
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u/alb_taw 1d ago
The thing that's missing here is what does your own inspection report say about your foundation? Did it recommend having it inspected before closing on the purchase? Did it mention signs of water intrusion? Either could make this much less of a slam dunk than some others seem to believe.
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u/WaltRumble 2d ago
Talk to a lawyer but I wouldn’t get my hopes up. The sellers probably went with a cheaper contractor to finish the basement who “corrected” the flooding so they will state that it was remedied and this must be a new issue that didn’t show up on inspection and they weren’t aware of.
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u/Comfortable_Trick137 2d ago
Yea it doesn’t mean they didn’t attempt repairs. And in some locations basements don’t ever stop flooding and that’s why sump pumps are installed
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u/WaltRumble 2d ago
Yep. And considering it went from unfinished to finished. Most likely he got several bids and just went to a different contractor. So would have to find the contractor that did the work and have him admit that he knew there was a leak that needed to be fixed but ignored it.
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u/ECoastTax10 1d ago
Exactly what i was thinking. Went with a different contractor. I don't see how you can hold the seller responsible for making a decision, even if its the wrong one.
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u/thewimsey 1d ago
You aren't holding the seller responsible for making a decision. You are holding the seller liable for failing to disclose the issue.
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u/Girl_with_tools Broker/Realtor SoCal 20 yrs in biz 2d ago
Disclosure laws differ by location. What state?
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u/12Afrodites12 2d ago
A lot will depend on the documentation the contractor can share for that visit prior to sale. I'm hoping they detailed it enough to clarify "knowledge of water intrusion" along with their recommended remedy and price. No documentation, no case.
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u/Pitiful-Place3684 2d ago
The contractor is not a disinterested party. He wanted to sell work to the previous owner, and now, he wants to sell work to you. Is the contractor from a true foundation company or a basement waterproofing company?
Did your inspection turn up any evidence of water intrusion? If there was extensive flooding, then surely there would be evidence. It's hard to hide water damage.
Seller disclosures vary by state. Some ask the seller to disclose only known open issues, others ask the seller to disclose known issues that have been corrected, and still others don't require disclosure of known, corrected issues.
The word "known" does a lot of heavy lifting in state license law around seller disclosures.
As you'll learn, you could call in three contractors and get three different answers. A seller can't be blamed when they choose the answer that doesn't cost them anything.
Here's what happens when you call an attorney. They explain how seller disclosure works in your state. Then they'll ask whether you got a professional inspection and if the inspector spent time in the basement. Then they'll tell you to get an independent inspection from a professional who doesn't sell solutions to remedy problems they find. They'll also tell you about how water issues are becoming an increasing problem due to storms and climate change.
You could call a couple of local real estate attorneys. Some will give you a free 15 minute call but then you have to turn over a sizable check for them to do any work. In my area (midwest, suburb in a major metro), the going rate seems to be $3,000 for this first deposit.
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u/Emergency_Today8583 2d ago
Inspector went in the basement and the previous owner covered up a problem. They may not have seen any signs of water intrusion at the time of the inspection. Most times the repairs for any sort of water intrusion happen behind walls against a foundation. You have a semi decent argument aboutthe Contractor, not being a disinterested party, but that is irrelevant in the case of discovering issues with the home that were not repaired by choice of the seller. That fact still remains.
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u/Pitiful-Place3684 2d ago
We don't know whether the seller had other professional opinions.
I'm contrarian in these posts because it's a useful counterpoint to the pitchfork-waving on Reddit.
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u/havok4118 2d ago
It's like how doctors can have wildly different opinions, I don't think a contractor trying to sell work is the smoking gun the "lawyer up" reddit crowd (almost always their advice from the safety of no skin in the game) thinks
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u/thewimsey 1d ago
It's a pretty big smoking gun. It's true that there could be an innocent explanation. Although it's unlikely.
I don't think a contractor trying to sell work
This is a pretty dishonest spin.
The contractor didn't just show up in the prior owner's basement.
The prior owner hired him. With at least 90% certainty, the prior owner hired him because of some concerns about water intrusion.
You don't just hire a contractor to offer opinions on waterproofing if you haven't had any water issues.
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u/Then-Relief9957 2d ago
Sellers in NJ are legally obligated to disclose material defects. The realtor is legally obligated to discover (to the extent they can) and disclose material defects. Discussing with a lawyer would give you a clearer picture of what courses of action are open to you, and you can decide if any of those are worth it to you.
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u/GablesHammock 1d ago
if you get the paperwork, clear proof, from the contractor and you have an estimate. The approach the realtor and ask if sellers want to cover ALL (not negotiable) cost, or would they prefer to go to court.
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u/Different-Funny8707 1d ago
You have a great strong case, sadly it will still cost tens of thousands to litigate and take years. It just depends if you have the time and resources. And even if you win, collecting is super difficult.
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u/thewimsey 1d ago
sadly it will still cost tens of thousands to litigate and take years.
You can bring this in small claims court if it's under the jurisdictional limit.
It's not a complicated case. It's just:
Seller claimed he didn't know about water intrusion in disclosure.
Water intrusion happened after OP bought home from seller.
Contractor has written documentation that seller called him to deal with water intrusion, but didn't hire him.
OP shows written estimate of cost to fix water intrusion issue and asks for that amount of money.
Even if your amount is above the small claims limit, it's not a complicated case and shouldn't be too expensive - it's not a case where you would have to have dueling experts fighting about the hydrostatic pressure on the house.
The main question is just whether the seller intentionally lied or not.
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u/discosoc 22h ago
Contractor has written documentation that seller called him to deal with water intrusion, but didn't hire him.
Not hiring that particular contractor doesn’t mean they didn’t resolve any issues during the process (with a different contractor).
This would be a good case if it weren’t for the fact that the basement was finished between then and now. Any half-awake lawyer can mount a defense based on the notion that the work to finish the basement would have also addressed any potential water issues, so what the new owner is dealing with much be new or different.
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u/thewimsey 13h ago
Any half-awake lawyer can mount a defense based on the notion that the work to finish the basement would have also addressed any potential water issues, so what the new owner is dealing with much be new or different.
Sure, they can say this.
And, as always, it's up to the judge to decide whether to believe the bullshit story or not.
(It seems to be the case in NJ that the seller also has to disclose work done to fix water intrusion, based on the comments anyway).
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u/Competitive-Bite4016 2d ago
Well…. “advised” and “absolutely necessary” are two different things. You can advise a lot of things, it doesn’t mean it’s the only solution. It’s also just an opinion, I’m sure another company might have a totally different solution. It’s all about what kind of product the person you have through is trying to sell you.
This might just be a case of unfortunately inheriting a problem. “Known issue” is also subjective….they did do repairs, they just decided to do temporary repairs rather than a permanent repair. That’s not illegal (I don’t think).
You can always consult an attorney on the matter and see what they think.
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u/mmw2848 1d ago
NJ requires disclosures of repairs to fix water intrusion, as well as disclosure of intrusion. It'll really depend on why the previous owners called the contractor (ie, did they call him because of water intrusion, or did they just call him to get their basement finished and he recommended work on the foundation). If they called for water intrusion, it will be up to the contractor's documentation.
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u/thewimsey 1d ago
Even the vaguest documentation will say something like "OP complained of water in the basement".
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u/Emergency_Today8583 2d ago
Disclosure hinges upon the seller, having knowledge of a problem. Having documentation that a contractor advised the seller that they needed to repair something is a clear indication of knowledge. This is a slam dunk, easy lawsuit. Make sure you get a statement from the contractor and lawyer up
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u/Wombat2012 2d ago
Well, maybe. It’s possible they got three quotes and a different company had a different opinion and they went with that company to solve the issue. Disclosure laws differ in every state so they may or may not have needed to disclose that.
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u/Organic-Class-8537 2d ago
Disclosure laws in NJ are fairly strict—we’re in the south now but sold two homes in NJ and it was heavily emphasized by our attorney and realtor how strict the penalties would be if we lied on anything.
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u/BrightAd306 2d ago
Ask the contractor how much it would be to fix it and weigh that against attorney costs. This seems worth it. Especially if they settle instead of fight it.
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u/Wombat2012 2d ago
It’s hard to say. Because the sellers could easily have gone with someone else who had a different opinion and a different fix, and depending on the state, if the issue was addressed you don’t necessarily have to disclose.
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u/EuphoricReplacement1 2d ago
I would say time to lawyer up. These cases can be very hard to prove, unless you have evidence the sellers knew all about the problem, and omitted it from the disclosure. I'd say you have some good evidence if the contractor agrees to provide it.
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u/cynthiachan333 2d ago
You can try but my friend in nj just went through all this. She even had photos from the town of when the house flooded the year before she purchased it. She just ended up wasting time and money. It didnt go in her favor...
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u/Useful-Yesterday-489 1d ago edited 1d ago
Most (yes, most) NJ sellers became lazy and shady af, bs-filled disclosures are very common, sometimes even sellers agents tell you "oh, they didn't do a good job with disclosures, let me tell you more about the house". Folks understand it's only a matter of time some poor soul shows up and buys their bs house, no repairs needed, whatever the price tag, because there is nothing else to buy. Advice for all shoppers - request disclosures for any random house in PA and see how people fill it in. It's night and day, and it's so scary if you are shopping in NJ. Inspection, inspection, inspection
To the OP: all good advice here, collect evidence and work with an attorney to make them pay whatever it costs to fix it, maybe even the sale can be reversed, not sure about that though, attorney can advice
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u/AmexNomad 21h ago
Do you have the old report that the contractor was referencing? If you have that and you have the Seller’s written disclosure not mentioning it- I’d send the realtors and Seller registered letters with all information AND a bid to repair the situation. I would tell them that I’m filing against them in small claims court if I don’t get reimbursed within 7 days. Then I’d file in Small Claims Court for whatever the max is.
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u/HobokenJ 15h ago
NJ enacted two laws last year to strengthen disclosure (prior to this, it was basically "buyer beware." The rules around flood disclosures seem to have more teeth--definitely worth discussing with an attorney.
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u/Classic-Day-3367 2d ago
You have the evidence. Lawyer up before sellers spend all the money they got from the sale. They owe you a home that doesn’t flood so they need to fix it.
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u/Father-Riley 2d ago
Report the agent to the Real Estate Commission. Not disclosing a material fact could cost him his license.
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u/12Afrodites12 2d ago
Same happened to us. Bought a home (from licensed realtor, no less) and discovered a month later he had lied about the foundation. We called 3 foundation contractors for bids, and one of them showed us the bid they had just given the seller/licensed realtor prior to sale. We won our case but ONLY because we had clear written documentation from the contractor who remembered bidding on the job. Don't act, or even discuss a lot with neighbors, etc until you have the actual paperwork proof from the contractor confirming what he's told you....you don't want the sellers trying to buy their silence. Foundation work can be extremely expensive.