Whether you bought your house last week, or a few years ago, you could be met with unexpected leaks, faulty plumbing, and other issues that should have been disclosed to you by the inspector, seller, or the seller's real estate agent. So what can you do when a nasty surprise has you looking at exorbitant costs? Sometimes, you may be able to recover some of the funds you need from a lawsuit. But then again, these problems often occur as the natural product of time and they are the burden of homeowners everywhere. You may not always be able to pursue a claim.

The good news is, however, that if you have insurance, you might be covered for the damage and repairs. This should be your first step, too look into your coverage before you look into any legal actions. If you are not covered for this, however, there are three different people who could be held accountable for your damages:

The Seller's Responsibility: In almost every single state, sellers have to provide disclosures about certain defects that they know are present in the house. Your average disclosure form is supposed to reveal any issues with appliances, the roof, the foundation, the electricity, water, and heating, etc. State laws will dictate how thorough these disclosures must be, but generally speaking, a seller only has to tell you about the problems they already know about. Generally, they can only be held liable if they tried to lie about a problem, or if they tried to patch or paint over an issue so you wouldn't catch it until the sale had closed.

The Seller's Broker: There are some states where agents are also supposed to provide disclosures if they discover a problem that you could not have known about before the sale. While a seller's duty to report problems is almost universal, you will really have to research your state's rule to determine whether or not the real estate agent was supposed to disclose a certain issue.

Your Inspector: If you bought a house, you probably should have had the home inspected first. An inspector is supposed to be a professional who can catch further issues that were unknown even to the seller. Before you go after anyone with a lawsuit, review your inspection report. The truth is, many homeowners find out that they should have known about as defect a long time ago, because the inspector caught it from the beginning.

When Can You File a Lawsuit for a Home Defect?

Of course, this will depend on the specifics of your case and your state's laws, but for the most part, the following things must be true of your situation (and you could always consult with a local real estate attorney about your case):

• The defect was from before you purchased the house. An issue is on you if it occurred during your ownership, whether it results from a lack of upkeep or it was the natural outcome of a house's aging. You might need an expert's assessment to determine whether or not the defect is new or from before your time.
• The defect was not obvious. If there is a gaping crack overhead, or some other kind of problem that you should have caught yourself before you bought the place, then you can't sue. If the seller tried to cover up the problem, however, or if the inspector missed something that should have been obvious to their expert eyes, then you might still have a case.
• The defect was not disclosed to you, or was lied about. Again, the three parties mentioned above could be held responsible if either of them did this.
• You trusted the incomplete or deceitful disclosure, believing that the house was up to code, that you would not need certain repairs, and could afford the house, etc. so you placed your offer.
• The defect has caused financial loss. This includes the expenses related to damage and repairs, whether or not you have actually paid for this yet. In a lawsuit, you can recover these financial damages.

If you think all the above are true of your case, you still want to hold off on the lawsuit. You can save yourself time, money, and hassle if you try a couple different tacks first.

With a demand letter, you can contact the responsible party or parties directly with a business-like letter, outlining your case, politely asking for the compensation you need in order to make repairs, or asking them to make the repairs themselves, for instance. You can give them a deadline, after which you can say that you will have to take them to court otherwise.

Before you go straight to a trial for, however, you could see if the liable person is willing to go through mediation, which is a time-saving process where the final decision is in your hands. A mediator facilitates negotiations between the two of you and any lawyers, and you have to agree on the final outcome of your case. Otherwise, you will have to calculate whether it will cost you more money to go to court or to simply do the repair work yourself.

Preliminary Steps to Filing a Lawsuit

You will first have to look at your state's guidelines to see if you are within the statute of limitations for the type of claim you want to file. These deadlines are different from state to state, and will also depend on what type of claim you're filing. For example, your suit could be over a "breach of contract", "negligence", fraud, or some other violation of duty or state law. There could be a different deadline for each type of lawsuit.

Then you have to decide whether to file in small claims court or in state court. Small claims court puts a limit on how much compensation you can collect. State laws differ on the lower and upper limits of the damages you can win, but this could be in the range of $1,500 to $15,000. But even if you suffered more damages than this from the defect, state court is not always the better option. Even though you can win more in state court with a strong case, it will probably cost you more in legal fees too. Is it worth the cost? Learn what your legal options are, and how strong your case is when you contact a real estate lawyer on our directory today!