Do I have legal recourse with a HUD/FHA loan regarding a failure of appraisal/inspect

[Zurkiba]

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

We purchased a HUD home in August of 2014 by using an FHA loan. The seller provided us with a home appraisal document with a property condition report (PCR). The property was sold "as-is"; however, the PCR states "The furnace could not be fully tested as gas is turned off at the property.The HVAC blower fan and AC were tested via generator."

We had an HVAC specialist attempt to turn on the furnaces but he refused to citing that they are entirely too damaged and are actually liable to burn the house should they be lit and used.

The furnace is not listed as an MPR repair but is listed as a 'repair' in the 'Comestic repairs' section of the appraisal. This line then points to the PCR.

My understanding of the document is as follows:

The appraiser, on behalf of the seller, failed to note the hazards of the furnace (via visual means).

My understanding of HUD/FHA is that heating is a requirement--ergo, the house was sold to me under the following assumptions:
First, the minimum requirements were met as determined by HUD/FHA inspection and associated appraiser.
Second, that the furnace, while not needing to be in peak condition, is still required to operate.

Do I have a legal recourse to seek the replacement/repair of the HVAC system?

 

[Zigner]

You were TOLD the furnace couldn't be tested. You should have checked further. Also, it's not the appraiser's job to inspect the property or to note hazards.

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

We purchased a HUD home in August of 2014 by using an FHA loan. The seller provided us with a home appraisal document with a property condition report (PCR). The property was sold "as-is"; however, the PCR states "The furnace could not be fully tested as gas is turned off at the property.The HVAC blower fan and AC were tested via generator."

We had an HVAC specialist attempt to turn on the furnaces but he refused to citing that they are entirely too damaged and are actually liable to burn the house should they be lit and used.

The furnace is not listed as an MPR repair but is listed as a 'repair' in the 'Comestic repairs' section of the appraisal. This line then points to the PCR.

My understanding of the document is as follows:

The appraiser, on behalf of the seller, failed to note the hazards of the furnace (via visual means).

My understanding of HUD/FHA is that heating is a requirement--ergo, the house was sold to me under the following assumptions:
First, the minimum requirements were met as determined by HUD/FHA inspection and associated appraiser.
Second, that the furnace, while not needing to be in peak condition, is still required to operate.

Do I have a legal recourse to seek the replacement/repair of the HVAC system?

 

[Zurkiba]

You were TOLD the furnace couldn't be tested. You should have checked further. Also, it's not the appraiser's job to inspect the property or to note hazards.

Here is where I have issue with that answer:
An HVAC specialist, upon a quick visual inspection, determined that the furnace was unsafe and could provide amble cause for concern for property damage and/or loss of life if put in use. The HVAC specialist did not test the furnace either.

Aren't HUD houses required to facilitate adequate heating for all of their homes?

 

[Zigner]

Here is where I have issue with that answer:
An HVAC specialist, upon a quick visual inspection, determined that the furnace was unsafe and could provide amble cause for concern for property damage and/or loss of life if put in use. The HVAC specialist did not test the furnace either.

YOU need to have your as-is house inspected prior to purchasing. As you state above, upon inspection, the problems were noted. Why didn't you have a home inspection done?

 

[Zurkiba]

YOU need to have your as-is house inspected prior to purchasing. As you state above, upon inspection, the problems were noted. Why didn't you have a home inspection done?

We had a county home inspector perform the inspection on the house prior to closing; unfortunately, he did it for free in an unofficial capacity. He did not indicate any issues with the furnace nor did he draft any paperwork or documentation for our use. His only role in our home purchase was to be a second opinion as it relates to his profession.

I only reference the Property Condition Report and the associated appraisal because those are the only written documents that I have that show that the furnace was inspected. There were several other line items that the appraiser indicated that were required for HUD/FHA eligibility that allowed me to finance into an FHA Repair Escrow Mortgage.

Lack of information regarding the furnace condition meant that I could not include that cost on my repair escrow amount.

 

[Zigner]

Lack of information regarding the furnace condition meant that I could not include that cost on my repair escrow amount.

Then you should have had it formally/professionally inspected.

 

[Zurkiba]

Then you should have had it formally/professionally inspected.

Thank you for your assistance.
I was hoping for an 'ah ha!' moment with precedent but it doesn't appear that there is one.

 

[TigerD]

Thank you for your assistance.
I was hoping for an 'ah ha!' moment with precedent but it doesn't appear that there is one.

There is. It just isn't the one you want.

DC

 

[HUD-1]

Based on my experience, you have no legal case. However, you could write a letter and submit it the contractor that sold the property on behalf of HUD. Explain the situation, that the house was marketed as eligible for FHA insurance, but in actuality, the house needed MPS repairs. Ask for say, one half the cost of a new furnace. Or some reasonable amount. The worst that can happen is that they say no.