Seller not disclosing Important information

[Bernard Sims]

Recently closed on my 4th 4- plex in Texas (Freeport to be exact). As I was talking to the city Permit official, we'r started discussions my plans for the property. Fron whaat he said afterwards, truly turned this deal upside down. So it turns out the previous owner marketed and sold the the property as a 4 plex, but knowing that the city onlky permitted 2 of the 4 units to be occupied due to zoning. The permit official said the building is on 2 - 50ft lots allowing a single family house on each lot. An exception was made since the building split the lot to only allow 2 of the 4 units to be occupied. Turns out the seller was well aware of this requirement but still marketed it as a 4- plex. On top of that, I acquired the property using a HML including the renovations. So we have already started initial renovations but everything has been halted as a result of the Permit issue. Since my scope of work has totally been nullified, I'm only trying to protect the property while we figure this situation instead of continuing with all the planned renovations. So my question is have any one dealt with a situation where the seller did not disclose important information that would've cause me not to purchase the property? Any legal discourse? And any advice on how to inform the HML?