Q: My husband and I sold our home of 25 years to a young couple this past winter. The house obviously wasn’t new, but it was in good shape. My husband isn’t all that handy with tools so whenever something needed to be repaired we always paid a professional to do it. We just got served with a lawsuit from the buyers. They have a long list of problems with the house that they claim we never told them about. Now they want something called “rescission” and a whole lot of money. We told them about everything we knew was wrong with the house and tried to be as honest as we could. Now we’re scared and don’t know what to do next. Help!
A: Obviously you’re going to need to take the papers you were served with to an attorney as soon as possible. You have 30 days from the date you were served to file an answer with the court.
Rescission is a remedy that is only available in certain, limited circumstances.
What the buyers are demanding is that you purchase the property back from them at the price you sold it for, plus pay damages for any repairs or improvements they made, plus the money they are out of pocket, such as moving costs, loan fees, etc.
While you may negotiate some sort of buy-back to avoid having to go to court, there are only two ways a judge will ultimately give them the rescission they seek.
The most common way to get rescission is to prove you told an outright lie and, if you hadn’t lied, they wouldn’t have bought the house. This is usually hard to prove because they have to show you actually had knowledge of the falsity of the statement. It sounds like they can’t even begin to make that case in court.
The second and much more difficult way to make a claim for rescission is to base it upon a claim of negligent misrepresentation.
A negligent misrepresentation doesn’t necessarily involve any evil intent on your part. You may have tried to be as honest and upfront as possible, but just made a mistake by saying, for example, the furnace is in great shape only to have it fail as soon as the buyers move in.
Obviously, we all make negligent representations with some regularity.
The reason it’s difficult to have a judge order rescission in this circumstance is because there are usually much less burdensome ways for the court to resolve the problem. In other words, the court can order the seller to pay the buyer enough money to fix the problem.
Before you get too worried, keep in mind that I’m giving you a quick rundown of the law in this area.
None of this matters very much if the buyers can’t prove you made a false representation or failed to disclose problems in the home which were known to you.
I can’t stress enough that you need an attorney to represent you.
It may seem obvious that when you are sued, especially for a large sum of money, you need an attorney. But, surprisingly, I see an amazing number of defendants who either ignore the papers they were served with or try to figure out how to answer them without a lawyer.
This often leads to the answer being thrown out on technical grounds and a default judgment being taken by the plaintiff.
And finally, remember that getting sued doesn’t mean you did anything wrong. The idea that anybody can sue anybody for anything, at least until the case gets tossed out of court, is absolutely true.
Tim Jones is a real estate attorney in Fairfield. If you have any real estate questions you would like to have answered in this column, you can send an email to [email protected].