Furnace misrepresentation

[AWitt]

What is the name of your state? Iowa

Hello,

My wife and I bought a 1564 sq. ft. house and closed on September 1st of 2004 through FHA. This is our first home and we have been very frustrated with an issue regarding our furnace. Here is the history of our situation.

We found our home during the last two weeks of July in 2004 and were determined to buy it as it was our dream starter home. We went through 2 open houses and made the decision to make an offer on the home in the last week of July. We made our offer on the home and after some negotiation; we decided to close on September 1st of 2004. We signed the contract, which had been drafted by our attorney since the seller was not using an agent, on August 2nd of 2004. At that time, the seller also signed a standard disclosure statement which indicated that the only known problem with the home was some minor termite damage that had been located outside the structure of the home and had been remedied years before. We had my father-in-law do the home inspection as he has owned his own rental properties for close to 20 years and was very qualified. We closed on the home as planned on September 1st and moved in on September 3rd.

Thanksgiving, 2004:

Out furnace stopped working Thanksgiving Day and we had a service technician come out the next day since we had some friends that loaned us several space heaters. The service technician started working on the furnace and immediately noticed that there were new parts in the furnace. After some minor troubleshooting, he determined that the problem was due to condensation damage on the controller board that finally led to its demise. I asked him where the condensation damage had come from and he pointed out that the motor that looked new was most likely removed and replaced after it had been leaking water. The water that it leaked had then dripped into the controller board causing it to "fry" for lack of a better word. In the end, the part cost us $440 including labor to install.

January 21st 2004:

The furnace starts making a horrible humming/moaning sound when the blower starts running and the sound is consistent until the furnace stops. It is still blowing heat, but it runs in short bursts very often. We called the technician again to come out and after a few minutes he tells me that the repairs will cost about $700-800. Again, he tells me this is due to the system strain of the condensation damage caused to one of the parts.

At this point I decided to look into why I had missed what must have been covered somewhere in our purchase agreement or disclosure. To my surprise I could not find anything indicating that there was anything wrong with the furnace. In the disclosure it clearly asked if there were any known problems with the furnace and the seller had circled NO. So I decided to call the company that had their sticker on the side of the furnace and see what work had been done to the furnace lately. I spoke with someone at the company and found out that work had been done to the furnace that summer and got them to fax me the invoice for the work. The invoice was dated 7/22/04. This was 10 days before he signed the disclosure. It stated that the exhaust motor and compressor had been replaced due to condensation/rust damage. They also recommended that the furnace be checked for CO (carbon monoxide) leakage and be serviced before the winter season. None of this was ever given to me at any point.

I want to know if I have any grounds for compensation for a new furnace or at least complete repair of the existing unit. Any advice anyone can give would be greatly appreciated.

Thanks for your time.

Sounds like a good case to me. Sue in small claims for total replacement; you can always negotiate downwards.

[HomeGuru]

I agree. Did the FHA appraiser inspect the furnace?

[AWitt]

Originally Posted by HomeGuru

I agree. Did the FHA appraiser inspect the furnace?

Yes, he did inspect the furnace and stated that it was functioning properly at the time of the inspection.

[HomeGuru]

Originally Posted by AWitt

Yes, he did inspect the furnace and stated that it was functioning properly at the time of the inspection.

**A: ok, thanks.

[R Wright]

The seller had the furnace repaired prior to sale by an HVAC contracting company. The repairing company didn't indicate any further repair beside a CO test, which has nothing to do with your current repairs.
In my opinion (and thats what it is) the previous owner fixed the problem he knew about. And with a reliable resource.
Speaking from experience as an HVAC contractor. You shouldn't have water damage in your furnace at all. I'm not going to guess and without being there to examine it, thats what it would be.
What I would look at carefully is your flue exhaust run. Ensuring it is sized properly and ran properly. If your furnace is improperly installed then you may have a leg to stand on as far as corrective cost recovery. Otherwise your about out of replacement parts with the exception of a couple. If your home inspector was licensed you might be able to look there. But that could hamper your inlaw relatioship.

Good luck Richard
P.s. replace it if it's old. You'll recoupe the cost over time in operating expenses. Hint A new variable speed furnace uses about a fifth of the electricity. Thats what I have.