Failure to Disclose Environmental Hazard
A building owner hired a real estate broker to sell a commercial property. The owner completed a seller’s disclosure form with the help from the broker. The disclosure form listed minor water seepage in basement, which had been repaired. The buyer bought the piece of property and held onto it for 8 years at which time they sold the property. As part of the new sale it was discovered that there was mold in the basement of this commercial property that had to be mitigated. The new buyer (now 9 years later) sued for failure to disclose the hazard. Although, the Statute of Limitation in this state was only two years, the new buyer did not discover the issue until 8 years after the sale. Therefore, the statute of limitations did not start until the damage was discovered and thus within the statute of limitations. The payout on this case was $800,000 from the building owner and $150,000 plus legal expenses from our broker client.