1. Please explain home warranties and why is it they are common elsewhere but don't seem to be available around here.

2. I have noticed that buyer agency representation seems to be much more prevalent in the Boston area than it is in Berkshire County. Please explain why and whether or not I need representation as a buyer.

3. Who pays the transfer tax in Massachusetts?

4. What is Title V in Massachusetts ?

5. What is the difference between assessed value and appraised value or are they the same? Who does the appraisals?

6. How does real estate compare to other investments?

7. We are having our house re-appraised for a mortgage/bill consolidation. Can any minor things be done to increase the value of our home prior to the appraisal?

8. My husband and I just bought a house and have discovered that due to unknown drain problems the downstairs full bath is useless, the basement floods, and in a storm the back door leaks resulting in flooding of the kitchen. What about disclosure?

Sewer Woes

If the facts are as you related: 1) the seller had taken steps to investigate a known sewer problem, 2) obtained written estimates and 3) failed to inform you as buyers, then there is clearly an obligation by the sellers to remediate the problem and if not , in most states, there are serious consequences for their intentional failure to disclose the facts and defect. In fact it would seem they intentionally and deceitfully withheld the information and in most jurisdictions that would potentially lead to multiple damages awards.

It is my recommendation that you seek the advice of counsel who can advise you of the laws in Illinois to confirm what I am telling you. Assuming I am right, that a seller has an affirmative obligation to disclose known defects (and so would their agent if they knew) then I would first recommend having your attorney send a letter stating your position and requesting their cooperation in getting the sewer line replaced at their cost. Only if they don't comply would I then consider more drastic legal action. I say this because any legal action involves cost and uncertainties.

The last question I have, and you do not address this in your email, is whether or not the sellers provided you with a written disclosure, often called a "seller's property disclosure form" something that is either optional or obligatory in many states. If they did, and failed to disclose on that as well, then you have further reason to feel confident about pursuing the matter.

Home Inspection Question

Just over a month ago, we purchased our first home. We obtained a
professional, ASHI-certified inspector. The day after we closed on
the home, we had a leak in the upstairs ceiling, enough to wet the
carpet. It has leaked each time it has rained and there are signs of wet
ceiling. More of a concern is a bathroom leak that has ruined the drywall in
the laundry room under it. We had a plumber in and discovered it's bad
tiling. The wall behind and floor under the tub may be damaged. We
can't shower. Evidence that the floor under it has been cut open in
the not too distant past. Neither issued disclosed. Inspector said roof
(based on age, but in good condition) should last a few more years.
Didn't spot missing tile grout. Major costs involved, what can we
do?
Recourse?

Answer

The good news is that you should be able to recover your costs of repair and maybe something more, depending on the circumstances.

The inspector is human and therefore subject to making errors and oversights which is apparently what happened in your case. Most inspectors today, and I believe all ASHI members, carry E & O (errors and omissions) insurance which provides coverage for instances just like yours where a defect is missed and you relied on their inspection to make a purchasing decision. Not that you would not have bought the house but that you might have asked for certain repairs to be made or an adjustment in the price to compensate for the needed repairs.

Now if there was also some failure to disclose on the part of the sellers, there is further potential compensation. Most jurisdictions (most states) have statutes requiring full disclosure of known defects and provide for punitive damages if it can be proven that defects were known and not disclosed to you the buyer.

So, it is my opinion that at the very least, you have just cause to seek compensation from the inspector but you also may have some rights of compensation from the seller as well.

Having said all this, the next question is how to recover. Unfortunately, unless you have experience with the legal system in your state, it is advisable for you to seek legal assistance. I say unfortunately because there is always a cost associated with the legal process and in cases where the probable recovery is small, the cost to collect may equal or even be greater than the recovery making the whole exercise rather pointless.

My first recommendation is that you hire another expert inspector to come in and document the conditions in writing and with photography as well. Then you obtain two estimates for the repairs from reputable contractors, in writing. Once you have this information you should first contact the original inspector, by registered letter, informing them of their oversight and asking for immediate compensation in the amount of the costs to repair stating that you will seek legal assistance if the matter is not promptly addressed to your satisfaction, meaning full compensation. You should provide copies of the estimates and photographs and the other inspector's report. I would state that you are giving the company 14 days to respond and an additional 14 days to reimburse you for the damages.

The other issue has to do with the seller's failure to disclose. My own judgment is that while the omission is actionable, the actual losses you have suffered seem relatively minor and when you consider the costs to pursue the matter with a lawyer, it simply would not pay you to do so. It is my hope that the inspector recognizes their oversight and responds affirmatively. Remember too, that you always have the option of taking your case to small claims court. The amount of money that can be recovered in small claims court is usually pretty small (thus the name) but it is a place where you can make your claim and you don't necessarily need an attorney.

My last piece of advice is for you to touch bases with the attorney that represented you in the closing, if you had one. In many states attorneys do not usually participate in the closing but instead the closings are handled by title companies. If that is the case in your situation, then I would recommend proceeding as I have outlined above.

I hope this is helpful and I wish you the best of luck. Remember, I do not provide legal advice, just common sense advice based on my years of practicing in real estate so if you feel the need or inclination to speak with an attorney, you should definitely go ahead and do that before proceeding any further.

Best of luck,

Paul