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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Your inspection should have turned it up.  Here's an article about something similar.  I am not a lawyer so this is definitely not advice.
http://realtytimes.com/consumeradvice/buyersadvice1/item/10017-20050718_falseseller

You didn't provide a lot of information but your first job is to track down the problem.  Is it near a bathroom, an interior wall, an exterior wall, etc?[/quote]

It's next to an exterior wall. Seems like it's a gutter issue. We're tracking down the cause of the water. We will fix the actual water problem, but the mold/rot damage should have been repaired. From the looks of it this is maybe 5 years old. [/quote]

I hate to say it, but I really don't have advice on if there's anything you can do about it in terms of the previous owner.

How large is the damage on the wall and the floor?  First time home owner?[/quote]

We are not first time homebuyers. The damage looks to be extensive.  :( We haven't yet gotten any estimates. We're working on removing all the carpet right now. [/quote]
Personally, I'd be inclined to do some of the work on the wall myself and hire someone to do the floor.  If I need to replace tons of 2X4's to rebuild a door or window frame or (especially) load bearing supports in the wall then I'd hire someone.  You might need to have a jack hold the wall up.  Get a drywall knife and cut the wall open, look inside and see how bad it is.  Don't do that above an electrical socket as they likely have the cord moving up a 2X4.  You could turn off the circuit breaker to that room if you're worried.[/quote]

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