Legal Question in Real Estate Law in New York
Commercial business disclosure responsibility
Just over a year ago we purchased a small business(assets included real estate). Within our purchase offer, it was stated that ''the seller shall provide for tests to show satisfactory water and septic systems.'' We have since learned that 3 months prior to closing, the well had been drilled deeper and supershocked with chlorine and then the ''closing'' test was taken and found to have acceptable results. A month after our purchase our water was tested to find unacceptable coliform counts(and there were many previous elevated counts over the years of which we were not aware) and subsequent tests found a detectable ecoli count (after our purchase) and we have been on a ''boil water'' requirement since last fall.Apparently, the water wasn't tested very often at the site because the previous owner insisted the bathroom facilities were not used by customers, when in fact they truly were. Since soon after our closing we began working with the health department and engineers to find an acceptable remedy. The costly work will soon begin and we wonder if we have any recourse in pursuing the previous owner for any of the costs for repairs? Thank you.
2 Answers from Attorneys
Re: Commercial business disclosure responsibility
You might have an attorney review the contract and the detailed facts and possibly sue for fraud in the inducement or other causes of action.
Feel free to contact me with any other questions.
Good Luck
RRG
Re: Commercial business disclosure responsibility
You ought to have an attorney review the purchase agreement you executed to determine first the extent of the seller's warranties and covenants with respect to the condition of the premises and then whether they "survived" the closing (rather than "merged" into the deed, which is often the case). The next step is to see whether you have indemnification rights and any "self-help" remedies against the seller, such as deferred payments, escrows, etc. Short of that, you may want to have your attorney look into the possibility of a fraud or misrepresentation action, which would have to be evaluated on the basis of the strength of evidence you have and your financial ability to pursue the seller in court. You may also want to discuss this matter with the legal counsel who represented you in the purchase transaction.
This reply is in the nature of general information, is not legal advice and should not be relied upon as such.
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