A poor sewer scope inspection prior to purchase lead to big loss

[Chad New]

My due diligence sewer scope inspection prior to purchasing a 1948 built home with enormous tree in the front yard returned with the cast iron pipe, main sewer line, under the house and the, clay pipe, in front of the house to city sewer was in “okay condition” and “good condition” respectively. Inspection date Nov 18, 2019.

After preparing the house to be rented and vetting tenants, I finally rented the property on March 12, 2020. On March 17, 2020, the tenants reported backed up kitchen drain. A plumber responded that evening and removed the clog and found evidence of roots and dirt. I knew the main line was solid, so maybe I have a problem with a feeder line from kitchen.  I had the plumber scope the system, at which time, they found evidence of roots through the cast iron pipe, breaks and holes in the cast iron pipe along with breaks with in the clay pipe. The whole sewer system was compromised and should have been discovered during the sewer scope inspection.

Had the sewer scope inspection revealed the extent of the repairs required to ensure the property was inhabitable; I could have chosen not to pursue the purchase or negotiated with the seller with this very important information. 

I have already attempted to resolve this problem by having my Agent contact the home inspection company on March 18, 2020. My agent related to me, the home inspection company stated the plumber is responsible for all complaints as they conducted the sewer scope inspection. I contacted plumbing company who refused to provide their liability insurance company information to me for a possible claim and volunteered to refund the inspection fee paid to the home inspection company. This sewer scope inspection was offered by home inspections company and the fee was paid to them not the plumber. This poor inspection prevented me from accurately calculating the cost of investment, causing a financial loss the sewer scope inspection was specifically ordered to prevent.

So after a complete re-drain under the property and linear liner on the clay pipe I am out a large amount of money.  Looking for advice from experienced investors.

This my first property and doesn't Cash-flow until I complete the detached garage ADU project and lost a big chunk of the cash for that conversion. I am in Orange County California.

I feel my recourse is:

High an attorney with possibility of throwing good money after bad if I do not win.

Small claims for $5000.00 (not $10,000 because the home inspections were paid from my PPM Co. C Corp checking account)

Anything I am missing?  The whole reason to do the scope in the first place was to protect myself and have the information I needed to negotiate or feel good about the asking.  The lack of a proper inspection directly led to this loss.

Thank you all in advance for reading and replying.  Stay healthy.