We are in contract for a house we adore. We had the inspection yesterday that showed some very scary things. Turns out, the support beams in the house have been mauled by termites. The current owner of the house nailed 2 by 4s to the beams to hide the damage. There is major roof leaking into the attic. They have walls up they have never pulled permits for, and to top it all off there was gas leaking outside. They signed on their seller disclosure that there was no issues and had never had termites. Is there any action of any kind that can be taken against the seller for actively lying to us and causing us to spend money on an inspection he was well aware it wouldn't pass? Even if its just to get our money back.
Defer to the terms of the contract. There should be provisions that state "seller shall not make any material representations to the purchaser" and that "if purchaser relies on such, and it is discovered that such reliance resulted in to contractual effectuation, buyer reserves the right to cancel the contract" and "receive a return of their earnest deposit". This is the generic response, but contracts usually have such protective clauses. In addition, there may be a clause that reflects that the purchase is "subject to a satisfactory inspection/engineer's report". Again, deference to the contractual terms must be made. Have a local real estate attorney review the verbiage and see what clause/provision an be used to have you break the contract absent being deemed to be in willful default/breach, as well as entitle you to return of your deposit. Good luck to you.
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This would be a very, VERY tough case for you to make. The Columbus Board of Realtors/Columbus Bar Association standard form residential real estate purchase contract is strewn with "as is" and "buyer beware" language. A clearly erroneous disclosure statement is a violation of the law, but proving that the Sellers KNEW it was erroneous is almost impossible -- unless the Sellers come right out and admit it. The support beams could have been dressed up by a prior owner or by a contractor without the current owner's knowledge. Or he might have "forgotten" about the termite damage. I suggest very strongly that it is not worth throwing more money down the hole in the hope of trapping the Sellers in a lie; just thank the inspector for doing a good job, and move on to the next house.
This is why your own inspection is so important. Even though you lost the inspection money, thankfully it gives you a reason to back away. You should get any earnest money deposit back but it would be tough to get reimbursement for inspection costs from sellers.
I agree with Attorney Bownas. Terminate your purchase contract based on the material defects found in the inspection, get your earnest money back and walk away. Everything happens for a reason - it doesn't sound like this house was meant to be yours. Good luck in your search!
I am licensed in the State of Ohio, posting a response to your question or issue does not create an attorney-client relationship and I AM NOT providing you legal advice. You should speak with an attorney who is licensed in your state to whom you have provided all the facts, before you take steps that may impact your legal rights--or rights to recovery of damages.
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