Hi and welcome to JA. Ray here to help you. Yes this is failure to disclose.Seller is liable for full disclosure.This is a breach of sales contract and would be grounds to terminate the contract and seek refund of earnest money. You should do this in writing setting out the breach by seller as failure to disclose.You copy the title company seeking a refund of your earnest money threatening suit if necessary. Law for reference Section 5.008, Texas Property Code, provides as follows:§ 5.008. SELLER'S DISCLOSURE OF PROPERTY CONDITION.(a)Asellerofresidentialrealpropertycomprisingnotmorethanone dwelling unit located in thisstateshallgivetothepurchaserofthepropertyawrittennoticeasprescribedbythissection or a written noticesubstantially similar tothenotice prescribed by this section which contains, at a minimum, all of the itemsin the notice prescribed by this section.(b) The notice must be executed and must, at a minimum, read substantially similar to the following:[SeeTRECNo.OP-Hathttp://www.trec.state.tx.us/pdf/contracts/OP-H.pdffortext ofdisclosurenotice.](c)Asellerorseller'sagentshallhavenodutytomakeadisclosureorreleaseinformationrelated towhetheradeathbynaturalcauses,suicide,or accident unrelated to the conditionofthepropertyoccurredonthepropertyorwhetherapreviousoccupanthad, may have had, has, or may have AIDS,HIVrelatedillnesses, or HIV infection.(d) The notice shall be completed to the bestofseller'sbeliefand knowledge as of the date the notice iscompleted and signed by theseller. If the information required by the notice is unknown to the seller, theseller shall indicate that fact on the notice, and by that act is in compliance with this section.(e) This section does not apply to a transfer:(1) pursuant to a court order or foreclosure sale;(2) by a trustee in bankruptcy;(3)toamortgageebyamortgagororsuccessorininterest,ortoabeneficiaryofadeedoftrustbyatrustoror successor in interest;(4)byamortgageeor a beneficiary under adeedoftrustwhohasacquiredtherealpropertyatasaleconductedpursuanttoapowerofsaleunderadeedoftrustorasalepursuanttoacourt orderedforeclosure or has acquired the real property
by a deed in lieu of foreclosure;(5) by a fiduciaryinthecourseoftheadministrationofa decedent's estate, guardianship, conservatorship,or trust;(6) from one co-owner to one or more other co-owners;(7)madetoaspouseortoapersonorpersonsin the lineal line of consanguinity of one or moreofthetransferors;(8) between spouses resulting from a decree of dissolution of marriage or a decree of legal separation orfrom a property settlement agreement incidental to such a decree;(9) to or from any governmental entity;(10) of a new residenceofnotmorethanonedwellingunitwhichhasnot previously been occupied forresidential purposes; or(11)ofrealpropertywherethevalueofanydwellingdoesnotexceedfivepercentofthevalueoftheproperty.(f)Thenoticeshallbedeliveredbythesellertothepurchaseronorbeforetheeffectivedateofanexecutorycontractbindingthepurchasertopurchasetheproperty.Ifacontractisenteredwithoutthesellerprovidingthenoticerequiredbythissection,thepurchasermayterminatethecontractforanyreasonwithinseven days after receiving the notice.Added by Acts 1993, 73rd Leg., ch. 356, §1,eff.Jan.1,1994.AmendedbyActs 2005, 79th Leg., ch.728, § 17.001, eff. Sept. 1, 2005 Form you are due here.. http://www.trec.state.tx.us/pdf/contracts/op-h.pdf It would fall under Item 3.. I appreciate the chance to help you tonight.You do not want this house.Once there are problems there are likely going to be more in the future.