Flooded Basement Leads To A Lawsuit – Who’s Liable?

House with Flooded BasementDon and Louise Beauchamp sold their home in November, 2007 and a week before closing in early 2008 the basement flooded. They paid $1,649 to dry out the rug and replace the underpad, but did not tell the buyers. The Beauchamps thought this was a “one off” occurrence and since they had fixed the problem there was nothing to disclose.

A few weeks after closing, the basement flooded again and it ended up costing Adam and Yogi Soboczynski, the buyers, more than $20,000. They were convinced the basement had flooded before and sued, arguing that fact should have been disclosed to them. Click here to view the full article.

 

Hidden basement water problems are one of the biggest sources of buyers’ complaints about their new homes. In older homes, it is almost impossible to completely prevent moisture from getting in – it’s more a question of how often and how much. In most cases, a home inspector can tell that there is moisture in the basement from physical signs (like efflorescence, the powdery residue left by moisture coming through the foundation and evaporating) or by using a moisture meter to detect dampness behind the drywall. In some cases, though, particularly when flooding is a recurring but rare event, there may be no signs whatsoever when the inspection is done. It’s clear from the above article that sellers need to be very careful what they say or document to buyers about their basement; it’s not at all obvious whether moisture issues must always be disclosed or in what fashion. In particular, sellers may want to be cautious about filling in a Seller Property Information Statement and especially about having it form part of a Purchase and Sale Agreement.