Every two years NAR (National Association of Realtors) publishes a report called Legal Scan. This report chronicles the most pressing legal issues facing Realtors. Property condition disclosure ranks as the #3 most disputed area in a transaction. #1 issue: Agency Disputes(Breach of Fiduciary Duty - which many times is related to non-disclosure of a property condition), Dual Agency, Buyer Representation Issues) #2 issue: RESPA (Kickbacks, Disclosure of Settlement Costs, Affiliated Business Arrangements #3. issue: Property condition disclosure - water intrusion ranks as the #1 problem area. Because water intrusion is so prevalent and damaging to the structure of a home, agents/brokers/home inspectors are usually trained to look for warning signs. These include a freshly painted basement, negative exterior grading, mold, smell, efflorescence (white residue), as well as as a host of other signs and symptoms. In theory and in practice, should any of these be present the Buyers agent has a duty to further pursue an explanation in order to protect their client. Obviously a home inspection is the first layer of defense. Secondly, the buyers agent should gather additional information from the sellers agent. In other words, ask questions. Jerzeygal explained that she had direct dialog with the seller - this is unusual. The agents (selling & listing) are generally involved and they bear witness, and usually document, the responses. This sure helps if things go wrong. It is important to understand how these situations are usually resolved. This is how they usually play out: Jerzeygal calls her agent and tells him/her about water in basement and what the neighbor said. Jerzeygal calls home inspector (if she had one)and explains the above. When he submitted his report he may have suggested, as logic said, a further evaluation. If he did, and jerzeygal didn't comply - he's off the hook. If he didn't, he will re-visit the site to determine if he missed something. This is obviously subjective. Logic is correct in that an inspection is a moment in time, but if there were conditions that could LEAD to water intrusion, they should have been mentioned in his report. Again, he has a higher standard than a lay person. Next the buyers agents should call the listing agent and say, "Hey, my client has a basement filled with water and according to a neighbor your client lied." In turn, the listing agent should pursue this with the seller. The two agents have a responsibility to investigate and it provides third party documentation. Many things can happen from this point forward, much of which is determined by the size & scope of defect and remediation - but the agent(s) should be involved. Agents live by referrals, they want their clients to be happy and they want disputes to "go away" quickly. Hopefully jerzeygal worked with a seasoned professional that will bring this to a satisfactory conclusion. marysl000 - it is faily well understood in the industry that sellers may have "selective amnesia" with regard to disclosure. A good listing agent will question the seller and really scrutinize the property because they don't want to be a party to any disputes. Buyers agents (good ones)usually have sufficient knowledge of property conditions and can identify potential problems and insist upon a home inspection. TRUST, but verify! Moral of the story - make sure the agent you work with knows what they're doing. Good thread with a lot of important info.

berniek: "Some people just don't understand, it's not done or needed in most real estate transactions." Its not needed only IF a person does not wish to protect their interests in the best way possible...I can also see how a trusting buyer may actually belive that if another "interested party" continually tries to convince them of such...which may account for why some folks don't do all they can to look out for their interests in such matters... berniek: "and the attorney does not disclose to his client any known previous defects, that would be another reason for me not to use an attorney. LOL! Yes indeed...lets dump attorney client privilege just so an attorney can divulge privileged info that may or may not even be valid..." Surely you jest? As I said before.....defects that existed may have been repaired...new defects may have materialized...defects may exist that were not noticed by the previous HI... Bottom line...the only way for ANY agent and/or attorney to best protect their client's interests in this respect, is to advise them to have a THROUGH home inspection performed...educate themselves enough about the process in order that they can advise them against bogus testing procedures...and get their client to understand that what matters is the house as it is NOW...not as it may have been a month ago...3 months ago, etc. As far as hidden or latent defects are concerned...the only entity who will know of them..if at all...is the seller. So all this "quest for disclosure" on the part of an agent should be really directed at getting the seller to do their part...and not in using an outdated and therefore now irrelevant HI report in the guise of "informing" future buyers. This is hardly rocket science.but I guess for some, it is (shaking head).

One thing to keep in mind -- if the inspection company gave you the "all clear" they may have given the previous owners the "all clear" as well. A lot of people (myself included) had a termite inspection as part of the purchase, and then keep the contract going which calls for treatment if necessary in future years (termite "insurance"). Not saying they should have disclosed or not, but having a contract with a termite company doesn't necessarily mean they knew they had termites (why not ask the company what work they did for the previous owners?)

bry1 is DEAD WRONG -- this is not a "100% chance" of winning. It is a lot more complicated. ( The facts kind of reads like an exam question in Property law yonks ago LOL!) Forget what some realtor thinks - they are not lawyers. Of course the agent thinks there is a duty to disclose - in the standard MLS contract, it typically says that the seller knows of no code violations or if they know of any, they have to list them (and failure to do so per the contract is a failure to disclose that can be legally enforced.) The realtor thinks the seller had to disclose because by the standard MLS contract realtors are use to that duty to disclose is written in the contract to purchase. That does NOT make the it the law that a seller has to disclose if it was language about conditions or defects or code vioaltionswas not in the contract they actually signed. It does not matter that they used their agent for the purchase. All that matter is whether certain events occurred: (1) At anytime did they ask the seller if there were any code violations that the seller knew about or whether there were any repairs needed that were required by law (and yeah some cities are really really picky about even trimming bushes - call it a code violation) If they did not ask and the seller did not, at anytime, actually and specifically claim the house was all up to code, the seller did NOT commit fraud and misrepresentation. Silence is not fraud unless there is a legal duty (by statute or contract) to speak. (And if he told them or their agent that the sewer line might be a problem and the repair was not covered in the contract terms, too bad, so sad, buyer's problem for being careless) (2) Then you have to show the seller had a legal duty to tell them without them asking. That only happens 2 ways (a) That there is a specific statute on the sale of real estate that says a seller must disclose any code violations to a buyer. While some states have passed statutes saying positive radon tests results that the seller knows about have to be disclosed, very few jurisdictions require the seller to tell the buyer anything - and the seller can stay silent. Unless there is statute (or city ordinance) saying a seller has to disclose a code violation (sewer etc), he did NOT have to tell them under the law OR (b) That the contract to purchase they signed mentioned code violations and had some kind of language that the seller was representing that there were no code violations. If the contract to purchase did NOT mention code violations or have language that the seller was representing that the property was free from defects , too bad, so sad, the buyer was careless. So unless the seller (1) flat out told them there were no repairs required by law OR (2) signed a contract saying there were no legally required repairs that he knew of OR ( 3) you can find a statute saying a seller must voluntarily disclose code violations to a buyer........ if you can't show any of those 3 things, then the buyers will probably be SOL. If the buyers can not prove any of those 3 things, the seller did NOTHING wrong - there is not claim for fraud because there was no misrepresentation and/or no duty to tell them something they did not ask about. And yeah the buyers (or their agent) could have done more. They could have called the local zoning department, the local building department and the local health department (or whoever does the sewer/water) and checked to see if there were any problems with the property. And yes that is STANDARD - many lenders require proof from the various government offices that the property is in compliance. Their agent got lazy. So the bottom line is can they prove any of the 3 things listed? And if they can, how much will it cost to fix the sewer line vs how much it will cost to sue the seller for the cost of fixing the line? If swapping out the sewer line will be LESS than they would spend on legal fees, then fix it and negotiate with the seller. If they have to sue, they have to pay their lawyer and will NOT get their legal fees from the seller. Small claims is where a fool has an idiot for a lawyer if they go in pro se. - and if real court...they are toast as pro se (representing themselves without a lawyer) Add in that even a short sewer pipe run from the street in can easily hit $3000-4000 to replace just 25-30 ft run, and the cost can soon be above small claims jurisdiction (typically under $5000) And that means real court - and no, judges do not cut pro se parties any slack and let them get by with not following procedures correctly. The buyers need to take the contract to purchase that they signed and make an appointment with a lawyer experienced in real estate law. Unless elpaso is a lawyer in your state, it doesn't know diddly about the statues or damage. The DTPA are basically aimed at retailers and manufacturers of personal property where the model statute has been enacted by states - and not all states have such a law and most require going to the state AG first