nondisclosure, encroachment, fraud

What is the name of your state? PA

In 2004 we sold a lot and now recieved a letter informing us that we sold the property knowing there were gas tanks from a neighboring property on the property we sold. We did not know there was any encroachment. When we bought the property we subdivided and did all the nessesary work involved such as survey, plot plans, county and township filings, road right of ways, deed searches, ect. The lawyers letter we recieved states that the client has obtained information we knew about this problem and since we knew about this problem it is fraud. Can we possibly be held responsible for something we didn't do or something we didn't know about? If there is encroachment, wouldn't the responsible party be the owners of the gas tanks?

Many states consider physical encroachment & possession as something that gives the owner "constructive notice" of the problem. That is, even if the owner (you) weren't actually aware of the problem, the law treats you as if you were.