Diana's Answer...

Dear Kevin,

If your state requires a legal disclosure in the selling process you and your wife are legally obligated to tell the whole truth.  Legally, "somewhat true" is NOT the truth.  Partial disclosures or not disclosing a problem enables the buyer to file a suit against the seller and may also cause the state to go after the seller for violation of a state statute.  Attempting to physically hide a defect so that the buyer does not notice it can be construed as an attempt to defraud under the law.  All of this could be very costly. 

Putting the legal aspect aside, the majority of buyers are now requiring that the property pass a whole house inspection.  This is a common contingency written in the "Offer Contract" that the buyer submits to purchase the property.  The problem with the contingency inspection uncovering the defect, is that by the time the inspection has been completed the property has been pulled off the market as "Sold" for a period of time and other potential buyers may have moved on.  Sometimes that inspection does not show up until just before the closing is scheduled, after the buyer has relocated and now had additional bills. 

The better approach is to follow the law and to disclose the leak.  You probably should find a way to fix the problem prior to putting the property up for sale.  Adding a drain does not fix the leak, it only diverts the water.  A true fix would stop the water coming in.  You should at least see if you can get an estimate on what it would cost to totally fix the problem.  With your wife in the building industry she may be able to get several contractors to offer an opinion as to what would work. 

Houses with defects do sell.  Your buyer may want a certain dollar amount to offset a repair.  It would be better, even if you did not want to take on the repair, if you had estimates about how to repair the defect.  That way you could offer that amount as an allowance to the buyer in order to complete the sale.  

Diana

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