Q: If the seller and their RE agent were aware of foundation issues, are they legally bound to report them?
Seller was executor, however we also learned for the past 10 years they have been the sole caregiver for the property (replacing roof, electric, etc). We came across someone previously under contract who provided the estimate they received for foundation work. Are they legally bound to communicate foundational issues? I understand not disclosing what you don't know. But if there is written documentation that you did know - can you keep this secret from buyers?
A: Withholding knowledge of a material defect like an expensive foundation issue from a potential buyer could subject the Seller to triple damages in a lawsuit. If you are the buyer you should contact an attorney ASAP.
James A. Greer agrees with this answer
A:
Dear Disclosure Issue Questioner: To try and clarify, if by the phrase "someone previously under contract" you mean that a different potential buyer had obtained a professional's estimate to perform foundation repairs ? and if you are certain that estimate was supplied to the Sellers ? Then clearly, YES there certainly may be a valid claim for "Fraud, Failure To Disclose" in connection with your purchase of this residence. The only other potential issue is the extent of the foundation problem - it has to rise to the level of "material to a reasonable buyer" (example: like a $5k-$10k, or more, repair cost to fix to cracks in the foundation). Your next step is to engage an attorney and initiate a "demand letter" followed by a demand for contractual mediation.
JIM GREER is an attorney licensed to practice in CO and CA and has specialized in real estate matters for the past 30 years; nothing herein shall be construed as the offering of legal advice insofar as Mr. Greer is not in an attorney-client capacity with the inquiring party. 303.818.8422
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