Seller undisclosed information

[Jason Kim]

We recently purchased a home in the Plano, Texas area. However several large issues have come up that were not disclosed to us during the process. Does texas allow for the home owner to give back the house and recoup all monies invested into the property? 

[Jerel Ehlert]

To answer your question: there is no "give back" mechanism for real estate.  Your option is to sue if the seller won't cure on their own.

There's a statutory "seller's disclosure" form that you are supposed to get at or before close.  Even then, the seller can only disclose conditions of which they are aware.  If they are unaware, and don't disclose, no liability.  The hardest part of this type of case is proving knowledge.

The next part is determining if a recovery is possible.  The most extreme remedy you asked about is rescission - the court undoes the contract and attempts to put each side back to where they were as if neither entered into the contract.  It's rare, messy, and courts dislike it because it can't be done well. 

Most likely remedy is "out-of-pocket" damages.  Say you bought the house for $100K because in the seller represented that it was worth $100K with the disclosures.  In reality, evidence shows that it was really worth $80K because of $20K in defects the seller knew about but failed to disclose.  In addition to the $20K in actual (monetary) damages, there's $5K in consequential damages (additional expenses for the longer rehab).  And if it goes to trial, you might get awarded attorney's fees based on breach of contract.  On average, expect $8-15K (or more).

So...assuming you can prove all this, and win on all counts at trial - Can you collect $40K from the seller?  I just made up numbers on damages, but you get the point.  You might end up with a judgment you may never collect on.

What happens if you sue and don't get a recovery?  You could end up getting a judgment against you for their attorney's fees.