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the seller was required to disclose that problem, you might have a claim against the seller.
However, most seller disclosure laws would require you to address this issue against the seller within a year or so of your buying the home.
The time for making a claim against the seller, if you have one, would be determined by the law in the state where the home is.
In addition to seller disclosure laws, there may be other laws in the books that would allow you to have a claim against the seller if they have misrepresented or committed a fraud against you.
In your situation, you have lived with the water problem — as some of our friends did and have — for many years, and based on your question it doesn’t appear all that water is hurting your home (which is a good thing).
Your city officials have told you that they will work with you on the drainage issue. It may be that much of your backyard floods because you are the low point in your area.
You may want to talk further with the city official responsible for the drainage in your area and find out what the city’s responsibility is, and who can make that determination.
You might also want to talk to some landscapers to see if the drainage issues can be alleviated by changing the landscaping. But keep in mind that if your property no longer takes that water, some other property might be affected.
For this reason, some cities will require you to have a permit to make any grade changes to your property.
Have another conversation with the city official after you have spent time educating yourself about the situation. Then you can figure out what has to be done and who is going to pay for it.
Please consult with an attorney for more information about whether you have any legal options against your sellers.