Oregon property disclosure law: buyer discovers cracking foundation that seller did not disclose - 20 months after closing

Question

I purchased a 110 year old house 18 months ago and am living in it. At the time of sale I waived inspection and did As-Is based on two factors: a 3rd party inspection was provided to me from buyer and I used the "Property Disclosure Statement" filed and signed by seller.

• seller occupied house for nearly 30 years.

• I discovered front porch (which is load bearing for the house - not a deck) - has been settling for many years resulting in a cracked foundation (in several spots) and a sinking supporting corner.

• I can see where the previous homeowner shimmed the foundation several times and even replaced a supporting beam with pressure treated wood (this wood wasn't manufactured until 1990's and even has tags on it - but no conclusive dates)

• the foundation is still settling and will cost me $10k to fix.

• since it is clear (the use of the newer wood is the only proof I have) that the previous homeowner had been dealing with this major problem and working on it but did not disclose it: is that a violation of the "disclosure statement"?

• Do I have recourse against seller? Is the seller liable or obligated to disclose this and if so what are my options?

Thanks for any information.

Answer 1

Do I have recourse against seller? Is the seller liable or obligated to disclose this and if so what are my options?

Probably not.

The general rule is that you accept any condition which could be discovered with reasonable inspection. When "At the time of sale I waived inspection and did As-Is" you are greatly limiting your claims.

If the seller believe that the work done fixed the problem, you probably have no remedy. It could be that the seller made a false representation in the disclosure (you'd have to look at the exact language) but even then proving it with only the kind of circumstantial evidence provided would be very challenging. In particular, as a practical matter, it isn't really economic to sue in a $10,000 non-disclosure case without open and shut clarity of fault, as opposed to some suggestive but ultimately inconclusive indicators.

You could always ask and state the case in a demand letter, but if you came to me as a potential client, I wouldn't take your case because the high cost combined with the low likelihood of success would make it unlikely that an attorney could bring the case in a way that would generate net value to the client.

Answer 2

The disclosure law for Oregon is here: it says what you must disclose. It covers questions such as whether the seller has authority to sell the property, where the water comes from, info on assessments, non-conforming uses, sprinkler systems, is the house insulated and so on. §9 ff is in the neighborhood of a relevant disclosure, vis,

A. Are there problems with settling, soil, standing water or drainage on the property or in the immediate area? [ ]Yes [ ]No [ ]Unknown

and 10

*A. Are there any other material defects affecting this property or its value that a prospective buyer should know about? [ ]Yes [ ]No *If yes, describe the defect on attached sheet and explain the frequency and extent of the problem and any insurance claims, repairs or remediation.

However, the disclosures are not promises, they are "best knowledge" representations. That means that in order to have any legal remedy, you would have to prove that the seller knew that one of their statements was false. If there was actually fraudulent misrepresentation, you still have available a tort law action for fraud (the fact that you have the option of an inspection does not negate that remedy). It is unlikely that the form which you signed contained any statement waiving your rights to legal action for fraud. But you would still have to prove that the seller knew that he was lying, and not simply mistaken in his judgment (e.g. whether there were "problems" with settling).