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It's really dependant on juristiction.
The septic leach field on my house failed six months after purchasing the home, an $11,000 problem. In my state, suing the previous owner requires proving that the previous owners knew about the problem. I suspect that they may have known, but I really couldn't prove it. The septic system was inspected at the time of the purchase, but this was a loan requirement and made no guarantee to me.
I looked into my options and forked out $11k, myself.
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