Home Purchasing - Hidden Defects?
I purchased a condo in June. We had a full home inspection done by a licensed inspector, to go along with our own inspection. Everything seemed fine and dandy, until this week.
We noticed that a 30 square foot section or so of hardwood floor in our kitchen was starting to warp. There was also wetness in on our garage floor, but not too much, or at least not much that I noticed because we have carpeting in the garage. After some investigating, we determined it to be a slowly leaking water heater. We also noticed some water damage to the dry wall surrounding the little nook where our water heater is in our garage. We called our home warranty people who sent a guy out. He determined that the water heater needed to me immediately replaced and that there was some structural damage at the base of the water heater and on the walls. We he came out to install the new water heater today, he pulled out the old one only to discover that the dry wall behind it was completely rotted away to the studs. The leaking water was going behind the wall and going into the kitchen where it was warping the hardwood. Also, he pulled up the carpet in the garage and discovered extensive water stains on the garage floor. In his words, the damage to the dry wall is 'years worth' of damage. There was also an insulator cover on the water heater, which is rare to see here in warm Southern California...which lead me to believe that the previous owner knew about this.
My question is what are my legal options in this situation. It is likely going to cost a lot of money to reconstruct the dry wall and fix the hardwood floor. Our warranty does not cover the incidental damage from the water heater leak, they only replace the water heater. We had no idea that this situation existed when we bought the condo. Does this sound like it falls into the category of a 'hidden defect' which the previous owner is liable for? Should I go after the inspector who for not noticing the severe dry wall damage? By the way, in June the inspector did note some corrosion on the top water connections to the heater, but his reports stated that it was not in any danger of leaking like this.
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