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What to do when the Seller Does Not Disclose a Defect

Purchasing a new property is exciting. Problems discovered after purchasing a new property are not. Issues that arise as the closing date approaches, on your closing date, or after purchase are extremely frustrating. Undisclosed defects or problems your new home such as basement leaks, mold, or rotting wood can be extremely expensive to repair.

A buyer’s ability to recover damages against the seller depend on the seller’s representations, the conditions discovered, and whether the buyer waived the defect. In short, the buyer must prove the seller lied and the buyer was unaware of the property’s true condition.

Pre-Closing: Did the Seller Lie on the Condition Report?

Under Wisconsin law, most sellers must provide buyers with a real estate condition report, which lists defects the seller knows about. Unless otherwise specified, the seller must give the buyers the report within 10 days after an accepted offer. If a seller fails to disclose a known defect, the report is incomplete, or they never send the report, the buyer may cancel their offer. And the buyer’s deposits and other fees must be returned to them.

The buyer must be able to show the seller actually knew about the defect. For example, they painted over water stains or rotting wood. There is more on this below.

Also, buyers can waive their right to this report. Buyers that waive their right, purchased the home “as-is”, or knew about defects before purchase will not have the option to cancel the purchase.

Post-Closing: Property Damage from Fraud and Misrepresentation

Recovering damages from property loss caused by fraud and misrepresentation after closing is possible. For example, if the seller did not disclose issues with the roof, foundation, or leaky basement. Wisconsin statutes can be very helpful in providing an opportunity for buyers to recover when a seller lies.

One Wisconsin statute helps buyers recover when damages are caused by intentional lies of the seller. If buyers can show the seller intentionally lied to the buyers so they would purchase the seller’s home, buyers may recover triple damages and attorney fees.

Wisconsin statutes also allow for money damages for “theft by fraud,” which is a criminal act. In real estate, this means a seller cannot obtain the buyers purchase money by lying to the buyer about the condition of the property.

Another Wisconsin statute safeguards the public from untrue and deceptive communications made during a real estate sale. This statue affords buyers double damages and attorney fees. This includes face to face communications. Silence on the part of the seller though is not sufficient to support this type of claim.

How Can A Buyer Prove that the Seller Lied?

The buyer must be able to show that the seller lied or made false statement about a condition of the property. This is not always easy. For example, subtle differences between a real estate condition report and the property’s actual condition it not enough proof in court.

The buyer must have evidence to show that the seller knew or should have known of the damaging condition and chose not to communicate it. The buyer must show that the seller had knowledge of the condition. The evidence that will prove the seller’s knowledge of the condition is case specific. We have demonstrated the sellers knowledge in a variety of different ways. For example, we have helped buyers where the seller had previously attempted repairs, made property insurance claims, or attempted to conceal the defects through new paint.

Conclusion

Murdock Law has helped numerous buyers who have been mislead in real estate transactions. If you have discovered a problem that should have been disclosed by the seller of your property contact us at 1-844-744-7529.

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