The one who sells the house usually is responsible for everything.
I'm no real estate lawyer, but I don't think this is true. To the best of my knowledge, real estate law in the US - except for the sale of a brand new home by the builder - falls under caveat emptor. Basically, the onus is on the buyer to research the house and conduct whatever inspections are necessary (at their own cost) to satisfy themselves that the house will suit whatever purposes they are buying it for. The only exception to this is if the seller deliberately tries to conceal some flaw or damage in the house; if the seller is ignorant of the defect, that is a legitimate defence in this case.
That's exactly why the suit is claiming that TC *did* know about the problem (and even then, it still seems like a weak case to me - you'd have to prove that TC not only knew about it but deliberately tried to hide it from the buyer). The case might be better against the realtor, since they're supposed to be up on that kind of stuff, but honestly I'd be surprised if the suit was successful based on what TC has posted.
well that's true, some things are required to be done by the seller in order to legally sell a house (may vary by state). Like having a title 5 or having town sewer. I don't know if that breaches contracts or anything like that.