Foundation Issues and Disclosures

[Adam Bennett]

Hello all,

I am in the buy and hold business and have not done a lot of selling. I have an associate who will eventually be selling a house he is occupying and rehabbing at the same time. The house he is working on has some serious foundation issues; drainage, cracks, and bowing. One wall has around 10" of deflection at its worst spot. He has talked about taking care of the drainage issues and not rebuilding or straightening the wall. I believe he wants to frame and drywall a new wall to cover the foundation issues up. 

I'm seeking out information on possible legal issues he will face if he tried to cover the wall up, does not disclose the foundation issue, a sale is made, and the buyer discovers the issue. 

I have repeatedly encouraged him not to do this but in his mind, it's OK for some reason. This completely goes against the way I do business and I am having a hard time letting it go. I know how I'd feel if I bought a house this way. 

Are there any realtors or real estate lawyers that can give me some insight on what consequences he may face if he follows through with the house this way? I'd like some talking points that may discourage him from following through. 

By the way, the property is in Madison County Illinois.

Thanks

[Wayne Brooks]

@Adam Bennett "As is" has nothing to do with disclosures, it is simply the opposite of "seller will make repairs required to meet buyer's lender requirements" up to a certain dollar amount, nothing more than that.  If it were that easy, disclosure laws would be irrelevant, as probably 95-99% of all sales are "as is"...I've never seen one that wasn't.  Banks get away with "no disclosures" as they rightly have never occupied the property, haven't done a thorough inspection prior to acquisition and don't know first hand of any hidden issues.