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Question DetailsAsked on 1/26/2012

JP
Undisclosed foundation damage and previous repairs?

I noticed a significant crack in the concrete block wall foundation of my basement. It's a horizontal crack about mid-height in the wall with stepped cracks on each corner - a serious issue. And I purchased this home, my first, just two years ago. The home inspector did not notice or note the issue on his report.
Now, I know how to go about getting this expensive repair completed: 1) Get structural engineer's inspection & repair recommendation 2) Hire a contractor to make repairs.
I reviewed other areas of the foundation and found evidence of inadequate but well-hid repairs. Further, I reviewed my purchase paperwork and noted that the seller marked "no" on the disclosure form box regarding known foundation issues. The seller remodeled the house on a flip after purchasing it as a foreclosed property. Can the seller be held responsible for not disclosing the issue? What, if any, evidence would be necessary to prove that they knew about the issue but failed to disclose it?

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1 Answer

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Unfortunately this is not something you will easily resolve; and even if you were to win, the amount of time and funds spent will probably exceed the cost of the actual repair.

Each state has different rules on what "as-is" means, but almost all use the term when it comes to realestate sales. At two years, you are facing a hurdle that any issue could be the result of new conditions, acceptable wear / settlement, etc. Has there been any changes in the area? (New house built next door, new addition, earthquake, flooding, etc?)

While you may have been given a home warranty with the purchase (do check your sales paperwork to see if there is any warranty and what it covers for how long) the house is sold to you as-is; it is your responsibility to raise concerns prior to taking over the house, so going back two years later is a huge up hill batle.

The home inspector is also going to be found faultless, as their reports almost always have words like "consult with an expert. . ." after each report section and they have disclaimers for missed items, etc. I got certified as a home inspector and was surprised at just how little they actually require you to know to become an inspector. They are really just an extra pair of eyes to help inexpereinced home owners look where most people don't look or go. You even mention that the repair work was well masked, so you didn't notice it until you began looking for it. A good inspector might have caught it, but you won't win any court cases proving yours wasn't good enough.

The Seller will claim that any foundation issues were fixed and resolved, which is why they marked "No" on the foundation issue section. They fixed it; so it was no longer an issue. If it came back, that is a new issue. You and I know this is bogus, but to win in court you have to prove intent; and the builder can easily show they thought it was fixed. Or, they might even be able to claim they were unaware - the repairs were from the previous owner, and were hidden so well HE and YOU didn't notice them.

So the next step is to meet with your home insurance agent. As I mentioned above, if there have been any enviromental changes (a new house next door could have changed the underground water table flow or pressures, for example) you may be covered. Even if there are no issues, you still may have a policy that allows for major repairs to be covered after a certian cost threshold, etc. You'd be surprised at what your home owners insurance covers - find out first; they might have in house or low cost engineers who will do the initial inspection, etc. They also will provide advice on your home sale; if they think you have a case against the Seller.

Best of luck on this issue. Make sure any solution you pay for solves the cause (Stress on the wall), and doesn't just fix the results (cracks).




Answered 1 year ago by Kenny Johnson

2
Votes

This is a question best posed in a Real Estate and legal forum. I gave up my license for Real Estate years ago but still remember a lot of it. Laws vary slightly state by state so I can really only comment based on our local laws. As I recall since the flipper never lived in the house he would not have been required to file a Seller's Disclosure Notice. Having done so though has probably opened him up for liability. It's an uphill battle to prove he knew about the repairs. Start by checking with your local permits office to see if he pulled the required permits for the work. If not, the burden of those permits, or lack thereof, follows the property, not him. You may get lucky and find some paperwork filed on the topic with the permits office.

If no luck with the permits you can track down the owner of the property before the flipper. That may be easier said than done. Check tax records for the name. Most are online and they may still be in the area. Ask them if they are aware of a foundation repair that was completed when they owned the house or needed to be done when they sold it. Tell them you are not after them in any way and can't if you wanted to but believe the flipper did not adequately do the job or disclose that the repairs were made. Depending on the information you get from them consult an attorney. You'll have to prove he knowingly deceived you. Doing some of this leg work up front will save you a lot in legal fees and entice an attorney to take the case for a percentage of the final take which reduces the amount you have to pay out of pocket while fighting the flipper.

If you can find a house the flipper is currently working on you may be able to ask his helpers about it. Throw them a little money and most will talk. Have a recorder in your pocket and get their names. They may have done the repair themselves and you've got enough proof to start proceedings. Ultimately you'll need a real estate attorney to help you file a case against the flipper. Also, by speaking with the permits office you'll get them turned on to him and they'll likely investigate to see what fines to levy against him on current projects. This will help your case as well. If your local government requires him to be licensed report him to the entity in charge of it. They may have a conflict resolution center that can save you money. Best of luck.

Todd Shell
Todd's Home Services
www.thomeservices.com

Answered 1 year ago by Todd's Home Services




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