Also, contact the water company and ask for a credit for the portion of the bill that is for sewage use. Since they know about the leak, they should be willing to credit you back at least some of that portion of the total bill.
Two words come to mind when buying a foreclosure, "Caveat Emptor".
You've gotten a lot of answers that basically come down determining exactly who you purchased the home from and if it was in fact a foreclosed home. Do you know who the seller was that was signing docs in this transaction and the second big piece of information is who the water company actually notified.
Also, are you sure the water bill was from a leak? Delinquent water bills will "follow the property" if not paid at closing.
If you can document that the seller had prior knowledge it would be worth at least a consultation with an attorney to see if you have a case and what the cost would be to pursue it and what you could recover (your costs and the repair & billing?) and determine if it is worth the time and risk for cost involved or whether to chalk it up to lesson learned.
I also counsel buyers I'm working with that when you choose to purchase a foreclosure or short sale property there are always going to be issues that will arise no matter how carefully you inspect and try to cover all unforseen issues....but you are typically getting a property at an excellent price for the market.
If it took place after bank took possession not much you can do bank would have no knowledge of this.
The property was bought from a bank as a foreclosed property. Usually the lender makes no warranty or guarantee- the lender has no idea of the condition of the properrty- first hand.
Your contract would address the issue of condition and inspection. It would be best to talk to an attorney- who woulf read your contract and tell you what remedies, if any are available. When buying a foreclosed propertyit is crucial to have a thoroigh inspection- wnen people are in foreclosure- they usually do not maintain the property the way they should.
If did not sign an as is addendum , then get your documentation together, and proof that the water company communicated that information to the right party. Wish you the best of luck.
First Weber Group
Certified Distressed Property Expert
First Weber Group