Q: We bought a home in November 2000, and the seller didn’t inform us of a flooding problem in the driveway when it rains. The inspection didn’t reveal the problem (it was dry at the time). When we realized the extent of the problem, we had to change the pitch of the driveway.

Are we entitled to file a breach-of-contract claim (which has a six-year statute of limitations) as opposed to an intentional misrepresentation claim, which has only a three-year statute of limitations?

A: In some cases, if a seller fails to disclose a defect, a buyer might have the right to terminate the contract before the sale of the home; in other cases, the seller might be liable for the repairs to fix the defect, along with lawyers’ fees.

The best thing for a seller is to be honest and disclose what he or she knows about a home. If the seller is unsure whether a potential defect is material, the seller is better off disclosing the issue.

As for a breach of contract or misrepresentation, you would have to determine whether your contract has any description from your seller on the water issue and your driveway. If your contract contains this, you don’t have a breach-of-contract claim or a claim for intentional misrepresentation.

You should review this issue with a lawyer who specializes in litigation matters.

The larger issue would be whether a seller would have had an obligation to disclose to you that the driveway floods during heavy rain. If the flooding doesn’t affect the home, its basement or the foundation, only the surface of the driveway, some sellers might not consider that issue material.

You have lived with this flooding issue for years and, it would seem, only recently corrected it. The seller might also have learned to cope with it.

Problems such as high levels of radon, lead-based paint or asbestos should be disclosed and fixed immediately. A broken window, leaky faucet, broken shower diverter or inoperative stove burner are examples of items that could be disclosed in a seller disclosure form but might not be considered material if not disclosed.

Q: My mother and I own a town house as joint tenants. I’ve rented out the property for two years; now I want to pass my share of it to my sister so she can live there. What legal issues should we be aware of? Do I have to file a gift tax return?

A: Talk to an estate planner or estate lawyer. You’re allowed to give anybody you choose a gift of up to $12,000 a year without having to file documentation with the Internal Revenue Service. If the equity you have in the town house is greater than $12,000, the gift to your sister will exceed the annual limit and require a tax filing.

Also, you could give portions of the town house to your sister over time to stay under the $12,000 limit.

Send questions to Real Estate Matters, P.O. Box 366, Glencoe, Ill. 60022, or contact author Ilyce Glink through her Web site, www.thinkglink.com.