Failure to disclose 2 floods and lawsuit prior to home purchase

[fugetaboutit]

What is the name of your state (only U.S. law)? NY

My wife and I recently purchased a house in NYC and have only been living there for 1 month. We recently found out that the house flooded twice in the past 5 yrs and there is a lawsuit pending from the previous home owners against several defendants. The 2 floods and the lawsuit where never disclosed prior to closing. The sellers opted for the 500.00 Non-Disclosure Credit. My wife and I would have never purchased the house if we knew about the floods. We don't want to live in fear every time it rains or snows. We are contemplating selling the house, but don't have any money left after the monstrous closing costs. What legal recourse do I have? If I sue, what damages am I suing for? I prefer not to contact the attorney I used. This is failure to disclose a material fact, as we would have never bought the house had we been aware of the flooding an lawsuit.

According to this article, it looks like I may have a leg to stand on http://scarsdalerealestate.wordpress.com/2011/08/31/flood-damage-failure-to-disclose-will-come-back-to-bite-you/

Sounds like I need a really good real estate attorney in NYC, any recommendations?

 

[Banned_Princess]

What is the name of your state (only U.S. law)? NY

My wife and I recently purchased a house in NYC and have only been living there for 1 month. We recently found out that the house flooded twice in the past 5 yrs and there is a lawsuit pending from the previous home owners against several defendants. The 2 floods and the lawsuit where never disclosed prior to closing. The sellers opted for the 500.00 Non-Disclosure Credit. My wife and I would have never purchased the house if we knew about the floods. We don't want to live in fear every time it rains or snows. We are contemplating selling the house, but don't have any money left after the monstrous closing costs. What legal recourse do I have? If I sue, what damages am I suing for? I prefer not to contact the attorney I used. This is failure to disclose a material fact, as we would have never bought the house had we been aware of the flooding an lawsuit.

According to this article, it looks like I may have a leg to stand on http://scarsdalerealestate.wordpress.com/2011/08/31/flood-damage-failure-to-disclose-will-come-back-to-bite-you/

Sounds like I need a really good real estate attorney in NYC, any recommendations?

Yes. I recomend you follow the "find lawyer now" link. or the yellow pages.

How did you find out about the floods?

NyC and Long island are flood areas. this is something you could have looked up yourself. My basement floods all of the time. its not a big deal, we just dont keep anything important down there, and have built up a floor to protect what is down there.

 

[You Are Guilty]

The lawsuit is public knowledge, and the $500 credit in lieu of the property disclosure will severely limit any potential recovery you may have (what did you inspection report and appraisal report say about flooding?)

A more practical concern is that if you can't sell/move due to not having the ability to pay closing costs, how to do you propose to fund a lawsuit for the next 2-3 years?

 

[FlyingRon]

What sort of lawsuit? A lawsuit isn't a property defect. The only lawsuits that need to be disclosed are those that would encumber the title of the property being sold. It doesn't sound like this is the case.

Was the flood plain nature of the property disclosed (that's mandatory). Otherwise, repaired damage need not be reported.

As pointed out, NY allows them to make that $500 out on telling you anything.
However, if they did make the disclosure, any mistatements or material omissions from the things the statute requires is actionable, unfortunately, the mere fact that there had been prior flood damage isn't in the standard disclosures.

 

[fugetaboutit]

How did you find out about the floods? From the neighbors, then Googled the previous home owners name and found lawsuit from 2006

What did you inspection report and appraisal report say about flooding? Nothing, zero, zilch. There are no signs of mold or flooding that I can see or tell and the home inspector was horrible. He missed other repairs in which I was able to get 1000 for post closing from escrow.

What sort of lawsuit? A lawsuit isn't a property defect. The only lawsuits that need to be disclosed are those that would encumber the title of the property being sold. It doesn't sound like this is the case. You are correct there are no liens against the property and the title company doesn't search Google for law suits.

I have spoke with 2 attorneys so far and it looks like I am SOL. For now the plan is flood insurance and some modifications to try and prevent this from happening again. Thanx for the responses.

 

[OHRoadwarrior]

NY law requires a disclosure form be presented to the buyer, by the seller, disclosing material facts. If seller lied on the form or did not provide it, you may have legal recourse. Questions 30 and 31 relate to you situation.

http://www.dos.ny.gov/forms/licensing/1614-a.pdf

 

[Zigner]

NY law requires a disclosure form be presented to the buyer, by the seller, disclosing material facts. If seller lied on the form or did not provide it, you may have legal recourse. Questions 30 and 31 relate to you situation.

http://www.dos.ny.gov/forms/licensing/1614-a.pdf

A knowingly false or incomplete statement by the seller on this form may subject the seller to claims by the buyer prior to
or after the transfer of title. In the event a seller fails to perform the duty prescribed in this article to deliver a Disclosure
Statement prior to the signing by the buyer of a binding contract of sale, the buyer shall receive upon the transfer of title a credit
of $500 against the agreed upon purchase price of the residential real property.

OP told us that the sellers took the penalty.

 

[OHRoadwarrior]

A knowingly false or incomplete statement by the seller on this form may subject the seller to claims by the buyer prior to
or after the transfer of title. In the event a seller fails to perform the duty prescribed in this article to deliver a Disclosure
Statement prior to the signing by the buyer of a binding contract of sale, the buyer shall receive upon the transfer of title a credit
of $500 against the agreed upon purchase price of the residential real property.

OP told us that the sellers took the penalty.

Thanks Zig. I couldn't see the forest for the trees on this one.

 

[You Are Guilty]

The $500 credit at closing is exceedingly common in NYC sales. Most RE attorneys even have their own separate pre-printed form noting the credit and disclaiming any representations about the property's condition. It's not 100% effective, but pretty dang close.

OP, you may also want to visit the courthouse where the prior lawsuit was filed and hit up their Record Room. Pull the case file and see if there is anything "interesting" in the documents that were filed. Oftentimes, there will be exhibits to a motion which can prove to be useful in these situations.

 

[fugetaboutit]

Well house flooded on 12/27 from heavy rains. Had about 6 inches of water. Started demo 2 days later and found old mold growing under kitchen cabinets from previous flood and also found that insulation only goes 2 feet up from floor. Previous owner did a quick fix after last flood and then sold.

I need a real good real estate litigation attorney in NYC for a consultation, any recommendations?

 

[TheGeekess]

Well house flooded on 12/27 from heavy rains. Had about 6 inches of water. Started demo 2 days later and found old mold growing under kitchen cabinets from previous flood and also found that insulation only goes 2 feet up from floor. Previous owner did a quick fix after last flood and then sold.

I need a real good real estate litigation attorney in NYC for a consultation, any recommendations?

You've been told before in this thread to use the Find a Lawyer link that's on every page (it's also in Zigner's signature).