We closed on our home a month ago. The home was fully inspected. The property is 3.2 acres. Our state requires a Seller Disclosure which we filled out honestly to the best of our knowledge. We verbally told the buyers since we sold by owner everything we could about the property. One of the things we told them was that there was a "hole" about an acre out in the front near the ditch that filled with several inches of water whenever we had heavy rains. We told them it was a bugaboo of ours because it took awhile to dry out and it was soggy in that area for mowing. They asked if it was a water line problem and we told them that we'd had the water company out to inspect the situation 2 months before we listed the house. We were told it had no connection to the water line and that hole was probably from a dead tree the previous owners had removed at some point (roots and all). The service guy also said that since our home sat up on a big hill and the front of the acreage ran downward -- that was likely the reason the rain was draining downward and pooling in the hole (area). We accepted that and wasn't at all concerned as this caused no problems other than inconvenience for mowing until it dried up after the rains. Fast forward -- we made this clear to the buyers. They accepted this and we closed on the house. Apparently, after heavy rains they saw the hole was filled with water and bubbling. They called "someone" to come out and had them dig up the yard several feet deep and wide. A clogged drainage pipe was discovered. They will be putting in new piping for proper drainage there. The buyers are asking us to pay for this. They say that it's our responsibility because it was like that when we sold them the house. Yet, we had NO idea. We had zero concern about the hole (4x3 feet circle) and only six inches deep. It would hold rain & then dry up. PERIOD. The water company came out and said it wasn't a concern -- so that's all we felt we needed to know. We had no knowledge of clogged drainage pipes underground on the acreage. Now the buyers are insisting we pay for the dig, discovery and work. We don't want to be jerks here. We left the house and property in immaculate condition and really think the buyers are nice people. We just don't feel we should be held financially responsible for something we didn't know about. In fact, we're wondering why it was necessary to make this repair? The problem discovered just made a 4x3 circle of the property wet for longer than desired after rain. It wasn't affecting the home or the rest of the property. If it had been, we would have investigated it more while we lived there. We looked at it as a simple inconvenience for mowing. Especially, when we even told them about the nagging hole that held rain. Thanks for any advice. We want to do the right thing, but don't want to be taken advantage of either. Thank you!
1 Answer from Attorneys
No matter how right you believe you are, and no matter how many lawyers tell you that you're right, the buyers are free to disagree and sue you. You can't prevent them from suing you if that's what they wish. It's unlikely that you, or any lawyer acting on your behalf, can convince the buyers to just go away without offering them money in some amount. Just telling them that you refuse to pay, or having a lawyer state that refusal for you, is likely a waste of your time and perhaps money.
If you don't want to offer to pay them anything, that's your prerogative, but you'll have to resign yourself to sitting back and waiting for the lawsuit, which can come at any time without warning within five years after the buyers discovered this issue. They'll have an opportunity to recover their attorney fees and litigation expenses from you, plus various types of money damages, if their claim's successful. Add that to your own litigation costs and you can see that allowing this situation to rupture into a lawsuit would put you at significant financial risk. Even if you're completely successful in the lawsuit, you'll have invested real money in defending it that you may not get back from the buyers.
Since a lawsuit will cost as much as tens of thousands of dollars in attorney fees and litigation expenses to defend if it goes to trial, plus whatever you may end up having to pay the buyers, you may want to consider negotiating a settlement with the buyers before this situation reaches the point of a lawsuit. A lawyer can help you do that and strengthen your bargaining position. Your attorney fees will be far less if you can resolve this issue without a lawsuit. You often save money in the long run by paying off the buyers to avoid a lawsuit that'll cost you more to defend than it'd take to settle the matter and avoid a lawsuit.
Please feel free to contact me if you'd like to discuss this further.
Harley C. Erbe
ERBE LAW FIRM