Imagine this. You just purchased your dream house in a brand new, sizzling hot subdivision. What could be better -- you've accomplished the American dream.

Then you receive a certified letter from the government. The letter informs you that your new paradise has been constructed on the site of a former asbestos dump site.

And there is more -- you are not the only one in trouble. About 60 other families who also live in your subdivision have the same problem. Actually, they have the exact same nightmare.

This is a true story being reported in various Oregon publications. While there are allegations suggesting that the developer knew, or at least should have known, there was a problem -- I certainly do not know the truth. I only know that about 60 families are asking themselves, "why us?"

And sadly, this is not uncommon. It seems that almost everyday, people find out that their house has a previously unrevealed toxic past.

In the United States, we have historically been guided by the doctrine of caveat emptor -- let the buyer beware. The idea is that when you purchase a home or piece of property, that largely, you're on your own.

You need to hire a professional to conduct due diligence -- which means asking the right questions, BEFORE you purchase. If you ask the right questions, the hope is, that you will receive the right answers.

But what happens when somebody doesn't want you have the right answers? What happens when the right answers make a property less valuable? What happens when the seller is in a better position to have the right answers than is the buyer?

Though the law is different in each state, many courts have created an exception to the doctrine of caveat emptor in cases of latent defects. In other words, problems that may not be unearthed through an ordinary due diligence investigation. The fact that an entire subdivision may have been constructed on top of a toxic dump may fit into this exception, for example.

What should you do if it turns out that the new home that you've purchased is sitting upon a toxic waste site? Assuming that this is not information that you had available to you before you decided to purchase a house, I suggest the following:

1. Consult with legal counsel. Nobody likes to involve attorneys in anything, but this is a big deal. It is a big deal for two reasons. First, because it involves your single largest investment in your life, your home. Also, because the health and well-being of your loved ones is now potentially at risk.

2. Consult with your state or local environmental agency. Sometimes there are loans and grants that are available that can help you with either a temporary or permanent solution to this problem.

3. Notify your insurance carriers immediately. You may, or may not have coverage for this problem. But if you don't file an insurance claim, you will never have any chance of obtaining coverage.

4. Your attorney should start assembling evidence as to whether or not the seller knew, or should have known, about the problem before the property was sold to you. Your attorney should also determine the applicable statute of limitations for filing a lawsuit against the wrongdoers if, in fact, somebody has committed a legal wrong .

5. Keep your priorities in order. Yes, you may feel like suing the world and trying to have everybody indicted. But remember that obviously you and your family's health is most important. Do you need to find temporary housing? Do you need to find an alternate supply of water? Are volatile organics seeping through your basement walls? Yes, the legal issues must be dealt with and your rights protected. But first and foremost, make sure that everybody's health is being protected.

If litigation is necessary, you should determine whether you are in a jurisdiction that has a consumer fraud statute. Many consumer fraud statutes make it easier to file lawsuits against property owners who intentionally omit material and important information before a house or property has been sold. The statutes often provide for punitive damages and attorneys fees.

Make sure that the attorney you hire is familiar with prosecuting fraud and misrepresentation cases. Litigation is hard ball, you need a lawyer that gets it.

In addition to fraud, many jurisdictions also allow litigants to pursue claims for misrepresentation, breach of contract, and negligence in cases where these kinds of deceptions have occurred. What is and is not allowed, tends to differ by state. That's why it's important that you hire a lawyer who's been around the block a good number of times.

I also recommend that affected neighbors band together and pool their resources. If it's just one of you against a large, perhaps national developer, you may not stand too much of a chance. But if it's 50 families who've all been hurt, because of unscrupulous activities, then you can form a powerful block and even out the playing field.

Finally, don’t blame yourself if you have been victimized. You didn’t want this to happen. You are, after all, an innocent victim.