This is Eric Lanigan of Lanigan and Lanigan attorneys in Winter Park, Florida. In this final part of the series on buyers’ questions about the property disclosure form, I want to talk about legal remedies if you discover an undisclosed defect with the home.
Should I Make Repairs or Wait?
Q: What about the house. I have a leaking home and I don’t have money to pay for it right now. Do I take out a loan and hope the lawsuit goes through?
Well you’re really talking about your own personal economics at this point. Obviously, if you’re sustaining water damage, it’s going to get worse over time. And the seller is going to take the position well when I left, the problem was only so bad and because you let it go and didn’t get it fixed you know now it’s twice as bad, now it’s five times as bad whatever the case may be and therefore this extra damage is your own fault. And frankly if I’m representing the seller I’m certainly going to try to use that defense. That you failed to mitigate damages.
Everybody in every kind of lawsuit, has a duty to mitigate their damages. You can’t just say well, this is just going to get worse and worse and worse but so what I’m ultimately going to collect the money from the other side. So it really doesn’t matter. The law doesn’t allow you to do that. You must make reasonable effort to keep the damages from getting worse than they currently are.
Now you get into the situation about impossibility. I bought this house I put every dime I have into it. And now I’ve got the drywall people tell me that it’s going to cost 10,000 dollars to do all this repair. I’d love to do it but I don’t have the money.
I’ve been in that situation before where clients have come with that exact story and the first thing we’ve done is written to the sellers and advised them of the damage, the current costs of repairs, the inability of our client to pay that at this time and invite them to come in and effectuate the repairs with an agreement that we will not use the fact that they fixed the repairs as evidence of proof that they were somehow liable for them. Nine times out of ten they’re going to say no they’re not going to do it. But you’ve established your effort to mitigate damages. You made the effort by contacting them and saying it’s going to get worse, I can’t afford to fix it but I’m going to give you the opportunity to mitigate your damages right now. And if they refuse to do it now that burden has shifted to them.
Borrow Money for Repairs or Wait for the Seller to Pay?
Q: Do I take out a loan and hope that the lawsuit goes through.
Well irrespective of how you do in the lawsuit, whatever the problem is it has to be repaired. So there again I would say the sooner you repair it, the less it’s going to cost you to repair it. So, if you can take out a loan from the bank or Aunt Gladys or from wherever, then do it. Because ultimately, it has to be fixed.
Can the Contract be Cancelled?
Q: Can I get rid of the house and give it back to the seller and get a settlement for the problems.
There we’re talking about again rescission. We want to rescind the contract. We want to put everyone back where they were at the time the contract was made. That can be a resolution to the case.
There’s two issues. You know, were you fraudulently induced or negligent misrepresentations that induced you into buying the house. And the other is what other things have occurred since you bought the house?
Let’s say for example somebody buys a house, they put in a swimming pool. They spend $30,000 to put in a swimming pool and then they find out that the house let’s say is infested with termites and is going to cost tens of thousands of dollars to repair all of that damage. It gets complicated now about putting everybody back where they were because the obvious question is well what about that pool. The seller’s going to say you know I’m not going to pay you for the pool. I didn’t ask you to put the pool in. And so if you want to walk away from the house and leave the pool behind then we can do the deal. That’s obviously not very palatable to the buyer.
And I think the response of the buyer in a situation like that goes to the issue of the enhanced value of the property that the seller is receiving. So, if I’ve put in a $30,000 pool by what amount have I enhanced the value of the house and therefore the seller in taking the house back should not be unjustly enriched by in essence getting a free pool. And those things all have to play out in court. Both the buyer and the seller have reasonable arguments.
And typically in a situation like that neither one or the other is going to 100% prevail. You’re going to have some resolution somewhere in a middle ground but obviously the more that has happened, the less likely rescission is and the more likely you’re going to end up with money damages because it’s just going to be easier to calculate.