Q: What happens if the seller of a home failed to disclose pending litigation against the home builder to the buyer?
The seller was notified by the HOA of severely faulty construction (based on a thorough investigation/inspection) repeatedly from 2014-2021. Litigation on behalf of the HOA is pending against the builder, however the seller sold the home to a buyer without disclosing the litigation or need for total reconstruction. The buyer may now be on the hook for a special assessment by the HOA to pay for reconstruction. Estoppel showed “no pending litigation” and disclosure forms at closing showed no issues with property… however it is very easy to prove seller knew of issues and pending litigation.
A:
That is the question for the lawyer you will need to consult. How much the seller is liable to you as the buyer is going to be based on several factors, including what evidence you have the buyer knew of the defects (that could be tricky to prove) and why your home inspection did not uncover these defects.
It sounds like, from your statement of the facts, you live in a condominium association (COA) not a homeowner association, since you mention the HOA passing a special assessment to pay for reconstruction. That might be more favorable to the seller's defenses since the HOA is responsible for the outside of the building, not the owner. You may have a case against the HOA if they did not disclose this on the estoppel and you relied on the estoppel.
You will need to take all of your documentation to a real estate litigator who can give you a proper assessment based on these documents and the defects.
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