Legal Question in Real Estate Law in Indiana

Real Estate Fraud

We bought our home 1 1/2 mos. ago. The disclosure statement said that there were no foundation problems and the basement was dry. Our inspector said the same thing. Our basement wall has now buckeled and it is flooded, the basement at the time of purchase was finished. The realtor and seller are asking us to refinance and pay off our second mortgage to them and then they will fix the basement. The engineer said that they should have known about this problem and it is their mistake. My insurance company is giving us an analysis free and said we should speak with an attorney. Can the seller get away with not fixing the basement? and should I refinance just to satisfy them? Also is there some statute of limitations on a property that I should be aware of? Thanks so much!

Asked on 5/24/04, 4:38 pm

1 Answer from Attorneys

C. David DuMond Law Offices of David DuMond

Re: Real Estate Fraud

Structural defect cases rely on quality expert testimony for success. So, obtain a written report from your licensed engineer about the problems. (An independent engineer would be the best, rather than an insurance company analysis.) If the written report confirms what has been said - that there was a defect the owner should have known about - then you may be in a position to do something about it. Be sure your written report includes an estimate for all remedial repairs. Don't refinance the property if the bad guys are the ones holding a second mortgage; you may be able to claim an offset against them for your costs. If the bad guys agree in writing that they will subordinate their loan to the new second and subtract from amounts due them all money spent on repairs, then it might be all right to refinance for the required repairs. Unless you have good reasons to trust the bad guys to be honest, competent contractors, I think the repair work should be done by an independent bonded contractor. There are, of course, limitation of action statutes, so you must act reasonably promptly. This is not a simple legal matter; you will need experienced counsel from a local attorney, who may also have a recommendation about the engineer. Ask your local bar association for a referral if you don't know anyone to ask. Good luck.

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Answered on 5/24/04, 10:11 pm

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