Mike writes: I purchased a lot that was owned by the city I live in. Years ago the city used the lot as a dump for tree stumps, chunks of concrete, brick, and cut logs. The builder discovered the fill when excavating for the foundation. Since he could not build on top of this, he had to dig much deeper and use much more material, which ended up costing me more than $10,000 out of pocket. The city did not disclose that the land had been filled with trash when selling the lot. The lot is in a development with about 12 other houses in it. I believe that junk cleared from the other lots were dumped into mine, then graded and planted with grass. Any advice I can get would be great — is there legal action I can take? Or am I going to have to bite the bullet?
Steve Bliss of BuildingAdvisor.com responds: A filled site can usually be built on if the fill material is suitable to carry the required load, was properly compacted when filled, and does not contain any toxic materials or organic material such as wood (which will rot and leave voids). Unfortunately, this is rarely the case with filled sites which can hide a lot of sins and, like yours, be planted over to look just fine to the casual observer. A soil or geotechnical engineer would need to take test borings at number of locations to establish the suitability of such a site.
Clearly the town should have disclosed the condition of the soil when they sold you the land, and they were probably obligated to do so under modern disclosure laws in most states – that is, if they were aware of the problem. In the bad old days, “Let the buyer beware” was pretty much the rule in real estate transactions. The trend has shifted toward making the seller of real estate more responsible to inform the buyer of known defects. Even with such laws on the books, however, it may be difficult to prove that the seller knew of a defect. Other issues to consider are the cost of bringing a lawsuit – typically well in excess of $10,000, and the fact that the seller is a municipality. Can you sue a city in small claims court? Again, this varies by state as well as the maximum amount of a claim in small claims court.
To determine your specific rights in your state, and the best strategy for resolving your dispute, you would need to talk to a lawyer — many will speak to briefly for free and tell you whether you have a snowball’s chance in heck. Laws on disclosure of defects vary from state to state, and “defects” in land are most likely treated differently than defects in an existing building.
Bottom line, I’m sad to say, is that you may need to bite the bullet. Hopefully, you got a good deal on the lot and the $10K bite is not so bad.