Trying to buy a Mold Infested House

[mrhcaphill]

What is the name of your state (only U.S. law)? Minnesota

We recently put a deposit on a home to purchase contingent upon inspection. We soon learned that the home has significant mold infestation and structural issues. We backed out of the deal and our earnest money was returned. The home is still on the market and we are still trying to purchase it. We have gotten numerous reports and estimates which exceed $200,000 to abate and rebuild.

The house is in foreclosure and the property holders are selling it in "AS IS" condition. Their contract to purchase "admits no knowledge of mold." However, after contacting the previous owner, I learned that the mortgage company/bank WAS informed of the problem well prior to foreclosure. The company also has a copy of the air and surface samples we had taken. In effect, they DO have knowledge of the issues yet are still selling without disclosing.

MY QUESTION: Are they liable if health issues arise (for unsuspecting buyers) and are they open to potential litigation for not disclosing?

[JETX]

Originally Posted by mrhcaphill

Are they liable if health issues arise (for unsuspecting buyers) and are they open to potential litigation for not disclosing?

Unlikely. Most foreclosure sales include a clause exempting them from liability since they have NO specific knowledge of the property. And since you admit they have an 'as is' clause in the agreement, that would also supersede any liability.

[FarmerJ]

Sounds like your going to be better off delaying any offer on this property and letting it sit , Fair odds are someone else will find the same problems and the bank will have more trouble selling it and drop the price. Or just looking elsewhere. Mold damages in homes is going to be way more common in the next few years as people buy more foreclosed homes. A home on my road was abandoned and in foreclosure now, the home owner took ZERO steps to reduce risk of damage so the final sale price could be higher, the electricity was left on, a tub faucet was dribbling. Three basement windows left wide open, When the power was shut off for non payment in early december it was cold enough that the pressure tank continued to drain , bath tub filled up with about 10 inches and froze up. heated flooring system & tank in basement froze up, a 80 gallon hot water heater , and what ever was in the pump up station in the basement since its mound system, & toilet bowls and tanks , that house is going to be a hard sell after spring melt comes with all that water having no place to go but into the finished basement.

[HomeGuru]

Originally Posted by mrhcaphill

What is the name of your state (only U.S. law)? Minnesota

We recently put a deposit on a home to purchase contingent upon inspection. We soon learned that the home has significant mold infestation and structural issues. We backed out of the deal and our earnest money was returned. The home is still on the market and we are still trying to purchase it. We have gotten numerous reports and estimates which exceed $200,000 to abate and rebuild.

The house is in foreclosure and the property holders are selling it in "AS IS" condition. Their contract to purchase "admits no knowledge of mold." However, after contacting the previous owner, I learned that the mortgage company/bank WAS informed of the problem well prior to foreclosure. The company also has a copy of the air and surface samples we had taken. In effect, they DO have knowledge of the issues yet are still selling without disclosing.

MY QUESTION: Are they liable if health issues arise (for unsuspecting buyers) and are they open to potential litigation for not disclosing?

**A: yes the bank could be liable. Terminate the deal.

[JETX]

Originally Posted by HomeGuru

**A: yes the bank could be liable. Terminate the deal.

My esteemed colleague, I respectfully disagree. The OP/Buyer is well aware of the conditions, including the mold. Also, the bank is clearly also aware of the buyers knowledge ("I learned that the mortgage company/bank WAS informed of the problem well prior to foreclosure. The company also has a copy of the air and surface samples we had taken").

As such, and with the clear 'as is' clause, I doubt that any court would find that the buyers were deceived due to a 'failure to disclose' a defect that they can prove the buyers knew about.