Assuming that the previous owner knew, or could to shown to have logically known (that is, based on the facts, any reasonable owner in their situation would have known) about the leaks and mold, then in failing to disclose a known but not readily obvious (to a buyer) condition, the seller committed fraud. Fraud would provide a basis to sue for compensation--such as the lesser of the cost to remediate/repair the condition, or the then-current value of the home (if it can't economically or feasibly be repaired). So if it appears that the owner must have known but hid the information, your neice could sue for fraud.