Seller failure to disclose

[AtlantaMom123]

After we bought the house last November we found several problems with the house and we have proof ( one written, other verbal) that he knew about the following things:
- previous termite infestations - his disclosure said there were none. We found the termite letter HE got when he bought the house which shows 6 past termite infestations including one active just before he bought the house
- drainage problems in the back yard cause water to enter the basement - we talked to the guy they called to take the water out but he might be an illegal immigrant so we're not sure we can use him to prove our case
- sloping floors - we talked to the guy who replaced their floors. He advised them to have the floors straightened but they didn't go for it. The kitchen floor slopes almost 2 inches over just 2-3 feet distance. This is caused by a center wood 2x10s have sagged excessively. We talked to the first owner of the house ( who sold it to the guy that sold it to us) and she said that she had a massive flooding from upstairs so we're thinking that this is the reasons for the sagging.

Basically, we would like to take the seller and the inspection company to court but have found the following obstacles:
- we signed a paper before the inspection that basically says that whatever happens ( errors/omissions) the inspection company is only responsible for the cost of the inspection ( i.e. can give us $500 back) and that we agree to going through arbitration first so I'm not sure we can sue them
- the seller moved to Connecticut. We are in Georgia. The real estate lawyer we contacted said that we would need to sue the seller in Connecticut which would cost us about $10,000 in legal fees ( that probably doesn't include the lawyer fees) and $10,000 in travel expenses. Considering that the repairs we need to do would cost us max $15,000 - $20,000, even if we win we would just barely pay for all the expenses. That doesn't make any financial sense. However, we're really angry with the seller and would like to go after him if at all possible just to teach him a lesson. We don't know what to do. We used most of our money on the downpayment for the house. We also have to fix some of the issues we found right away ( e.g. water getting into the basement) so we're not really willing to spend $20,000 if not more not even knowing what the outcome would be.

One extra complication: we negotiated the price and all the repairs with the home owner, but once all the contingencies were removed the relocation company ( that the seller was using) stepped in and signed all the paperwork. So theoretically we bought the house from the relocation company. However, the relocation company's sale agreement had the original owner's disclosure attached as part of the agreement. Also, when the warranty deed for the house was transferred, it was transferred directly from the original home owner to us. So can we even sue the original home owner? Won't he be able to claim that he sold it to the relocation company and not us? If so, doesn't having his signature on the disclosure and the direct transfer of the ownership from him to us give us the right to go after him? We don't have a chance with the relocation company because they got us to sign a document stating that they never lived in this house and don't know anything about it so they don't give any warranties other than what's in the seller's disclosure.

Sorry for such a long post but there are a lot of issues involved here.

Please let me know if you have any suggestions for how to do it. If the house is in Georgia, the transaction was done in Georgia and it involved a Georgia specific seller disclosure document, why can't we sue the previous owner in Georgia? Doing it long distance in Connecticut seems like an impossible task to do.

thanks,

 

[seniorjudge]

How much (in a dollar amount) were the total damages you suffered?

 

[AtlantaMom123]

More info on the case

So far we managed to have very few repair quotes done because most contractors just come in, have a look and then never give us a quote after that so it's very frustrating. Here are my best quesses. The firm quotes we managed to get are marked as "quote":

The issues that we believe the seller failed to disclose:
- we had to have 2 structural engineering inspections - $1,000 total ( already spent)
- very sloping floors in the kitchen and dining room - the cost depends on how much of a fix we want. At the very least we need to put a steel post for $1500 ("quote"), but that will only prevent further sagging, not actually fix the floor. To make the floors even would probably cost additional $9,500 - total of $11,000 ("quote")
- drainage problems which cause water to enter the basement - no quote yet on drainage problem but I'm guessing $1500 for drainage, $300 replace drywall that has mold on it, repair water damage $1,000
- termite damage ( there were 6 infestations so I don't know the full damage but just the one we can see right now would cost about $2,500
- water entering the garage every time it rains and reaching all the way under the wall between garage and house - again my guess would be $1,000
Total expenses due to seller failure to disclose ( with making the floors straight): around $16,800
- also, it turns out that the jetted tub in master bathroom can only be filled half way before the hot water runs out ( it's a 2 person tub). We talked to the person who bought the house when it was originally built ( not the one who sold it to us) and she said this has always been a problem. How do you put a price on that? Replacing the hot water heater with a bigger one?

Some of the above issues we believe should have been caught by the home inspector. Here are some additional items that we need to repair that the inspectors failed to point out:
- brick veneer needs structural support $1,300 ("quote")
- there are about 14 cracks in the drywall on the second floor at the corners of windows and door frames. They were never mentioned in the inspection report. The structural engineer we hired after closing said they were "normal". However, at the very least they need to be repaired.

This whole experience caused me a lot of stress and I got quite depressed and angry. Before any contract was signed I specifically told my realtor that if there is ANY kind of water damage in the house I'm not going to buy it so the seller knew how I felt. Yet, he didn't disclose a massive flooding the first/original owner disclosed to him ( from the second floor bathroom all the way to the kitchen/dining room - probably the reason for sagging floors) and the water damage in the same area our seller had from the fridge. I am currently seeing a counsellor who helps me cope with this difficult situation. How do you put a price on that? What about all the time my husband had to take off work to meet with the various contractors?

Isn't it a fraud to lie on the property disclosure when you are aware of the problems?

I appreciate any help you can provide.

thank you so much!