Homeowners Recoup Loss in Failure to Disclose

Robinson & Henry’s knowledgeable attorneys give their professional insight in “From Our Perspective” where we take a closer look at successful outcomes achieved by our attorneys. 

In this episode, Civil Litigation Associate Edmund Robinson discusses a real estate dispute he helped a client resolve. Buying a home is a milestone for many people, bringing excitement and new beginnings. But for our clients, closing on their dream home came with an unexpected revelation.

Soon after moving in, they discovered the city was planning to install a water pipeline through their property, a detail the sellers left out. Edmund helped the client reach a favorable settlement with the sellers for the failure to disclose.

Past results afford no guarantee of future results; each matter is different and must be judged on its own merits. Facts are those of an actual Robinson & Henry litigation case. 

Dream Home Shock

Our clients, who recently moved to Colorado, were excited to settle into what they thought would be their dream home, complete with beautiful views and a peaceful setting. 

But on the day they arrived, they were shocked to find construction workers already on their property. Our clients were told a water pipeline was set to be built right across their land, something they weren’t made aware of before closing on the house. Instead of settling into their new home, they suddenly found themselves dealing with an unexpected and disruptive pipeline project they had no idea existed.

Seller Responsibilities in Colorado

In Colorado, sellers have a duty to disclose any known issues that could impact a buyer’s decision. These issues aren’t limited to a property’s current conditions. Sellers must also inform buyers of potential future construction, especially government projects like pipelines or road expansions. 

Colorado’s standard seller’s property disclosure even has a section dedicated to any approved but uninstalled improvements that could affect the property. In this case, if the sellers knew about the pipeline and failed to mention it, they were in breach of this duty.

Legal Options for Buyers When Things Go Wrong

As a buyer, the first step is to review your contract, which outlines the obligations between you and the seller. In failure to disclose cases, you may have the option to pursue monetary compensation for damages. 

Another potential remedy is specific performance, where you can ask the court to require the seller to fulfill their original obligations. In this case, Edmund and his team helped the couple seek financial recovery to compensate them for the pipeline disruption. 

Key Steps for Buyers Facing Disclosure Issues

If you sense something is wrong or face a serious issue, the first step is to gather all relevant documentation. Keeping these documents organized and accessible is key, as they can become essential evidence if you have to file a claim. 

Edmund stresses the importance of keeping every piece of communication, from contracts to emails, in a safe place. This documentation helps our team build a compelling case if there is evidence the seller failed to disclose an issue like this pipeline.

A Successful Outcome

With Edmund’s legal guidance, the couple received a settlement of nearly $500,000. 

Our clients can move forward with peace of mind in their new home, knowing they recovered financially from the unexpected disruption of the pipeline project.

Buyers dealing with undisclosed issues should seek professional legal guidance. Robinson & Henry has a network of skilled real estate litigation attorneys who can help you determine your best options.

Read this video’s full transcript:

Question: Edmund, thank you for joining me today. Tell me more about our client and why they reached out. 

Edmund: Thanks for having me. Our clients reached out to us originally because they had moved to Colorado and purchased their dream home. Beautiful views from the property they bought.

Unfortunately, when they literally the day they got to their property, found construction workers to be present on site for a municipal area here in Colorado.

Question: What is the duty of the sellers to let any buyer know about future development on the property? 

Edmund: In Colorado, all sellers of real property have a duty to disclose any adverse material facts actually known by the seller to the buyers. Now these adverse material facts, they're not limited to just things that might be there today. There are certain facts that sometimes pertain to potential future construction. 

For example, there's an explicit provision in the contract that says that if a seller knows of any government improvements that are approved but not yet installed, that may become a lien against the property, that that seller should disclose them. And that means that if you receive a notice of some potential construction that was approved, you have to tell your buyers. 

Question: As the buyer, what legal options did our client have in this case? 

Edmund: As the buyer, what you first do is you have to take a look at the contracts and what governs the relationship between the parties. From there, your options are essentially to try and seek monetary recovery. 

Sometimes in contracts, you'll see what's called specific performance and that’s attempting to get the other party to perform their obligations in accordance with what's in the contract. In order to make those determinations, I think buyers should trust their instincts.

If they feel like something's wrong, what you should do is you should reach out to an attorney and see if there are some kind of relief that you're entitled to. 

Question: What steps should a buyer take to gather evidence to pursue a claim? 

Edmund: When a buyer kind of has that instinctual sense that something's wrong or if it's more severe make sure you hold on to all your contracts.

Make sure you keep them in a place where they're easily accessible, compile all correspondence, between the parties, emails, text messages, even call logs. 

Anything that you can think of that might relate to the transaction at issue, hold it, keep it in a safe place because your lawyer is going to want to see it.

Question: Ultimately, what was the outcome of this case? 

Edmund: Fortunately, we were able to achieve a pretty favorable outcome for the clients, which resulted in a payment to them of nearly a half of a million dollars. 

Question: If someone is watching, they bought a home and they’re in a similar situation. What advice would you give?

Edmund: My advice to a buyer faced with a similar situation would be to call Robinson & Henry. We've got a large number of lawyers all throughout the state of Colorado who are well equipped to address the situation and provide you with advice on your options moving forward and we’d be happy to help you in your time of need.