seller's disclosure not truthful

[judy7644]

closed on home in Tucson, AZ 6/27/00. Moved in 6/30/00. Ten days later we found wet carpet and wall in bedroom behind utility room. Had contractor come evaluate problem. Found a/c condenser not installed to be level, and water was going off back of pan, which was propped up with 9 V battery, into adjacent walls. Furnace was too small for a/c, causing coils to freeze, compounding problem. Also found stachybotry atra mold in adjacent water damaged wall and carpet. Found multiple code violations, some that could have caused an explosion. Had to have everything taken out, and we replaced furnace, water heater and a/c. Had to have environmental clean up crew take out plaster walls up to 4 ft from floor, pull out and dispose of bedroom carpet, treat areas with chemicals and seal. They found carpet pad had been replaced in area where mold was worst, indicating someone knew there was a problem.

Sellers disclosure said furnace less than 2 yrs old, water heater less than 5, and that both installed by licensed person.Also said no to whether there was asbestos in the house. Stated "tenants never expressed any concerns' to question about whether there were any HVAC problems.

So far we have spent over $12,000 for repairs and replacement. We sent demand letters to seller, home inspector and sellers realty agent. Only the inspector responded, saying he was not liable and sent our fee back. Realtor has not responded, and seller has still not accepted delivery of certified letter and it's been over 10 days.

Should we take this to court? We can't afford to lose any more money - this has already eaten up our savings and we also had to borrow money. We have gotten written statements from all the repair and testing people saying what caused this problem- which was faulty installation of an inadequate furnace. Help!

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by judy7644:
closed on home in Tucson, AZ 6/27/00. Moved in 6/30/00. Ten days later we found wet carpet and wall in bedroom behind utility room. Had contractor come evaluate problem. Found a/c condenser not installed to be level, and water was going off back of pan, which was propped up with 9 V battery, into adjacent walls. Furnace was too small for a/c, causing coils to freeze, compounding problem. Also found stachybotry atra mold in adjacent water damaged wall and carpet. Found multiple code violations, some that could have caused an explosion. Had to have everything taken out, and we replaced furnace, water heater and a/c. Had to have environmental clean up crew take out plaster walls up to 4 ft from floor, pull out and dispose of bedroom carpet, treat areas with chemicals and seal. They found carpet pad had been replaced in area where mold was worst, indicating someone knew there was a problem.

Sellers disclosure said furnace less than 2 yrs old, water heater less than 5, and that both installed by licensed person.Also said no to whether there was asbestos in the house. Stated "tenants never expressed any concerns' to question about whether there were any HVAC problems.

So far we have spent over $12,000 for repairs and replacement. We sent demand letters to seller, home inspector and sellers realty agent. Only the inspector responded, saying he was not liable and sent our fee back. Realtor has not responded, and seller has still not accepted delivery of certified letter and it's been over 10 days.

Should we take this to court? We can't afford to lose any more money - this has already eaten up our savings and we also had to borrow money. We have gotten written statements from all the repair and testing people saying what caused this problem- which was faulty installation of an inadequate furnace. Help!<HR></BLOCKQUOTE>

You have claims due to misrepresentation and nondisclosure. File against the Seller and real estate agent. The home inspector may also be liable but I would need more details.

 

[homedoc]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by judy7644:
closed on home in Tucson, AZ 6/27/00. Moved in 6/30/00. Ten days later we found wet carpet and wall in bedroom behind utility room. Had contractor come evaluate problem. Found a/c condenser not installed to be level, and water was going off back of pan, which was propped up with 9 V battery, into adjacent walls. Furnace was too small for a/c, causing coils to freeze, compounding problem. Also found stachybotry atra mold in adjacent water damaged wall and carpet. Found multiple code violations, some that could have caused an explosion. Had to have everything taken out, and we replaced furnace, water heater and a/c. Had to have environmental clean up crew take out plaster walls up to 4 ft from floor, pull out and dispose of bedroom carpet, treat areas with chemicals and seal. They found carpet pad had been replaced in area where mold was worst, indicating someone knew there was a problem.

Sellers disclosure said furnace less than 2 yrs old, water heater less than 5, and that both installed by licensed person.Also said no to whether there was asbestos in the house. Stated "tenants never expressed any concerns' to question about whether there were any HVAC problems.

So far we have spent over $12,000 for repairs and replacement. We sent demand letters to seller, home inspector and sellers realty agent. Only the inspector responded, saying he was not liable and sent our fee back. Realtor has not responded, and seller has still not accepted delivery of certified letter and it's been over 10 days.

Should we take this to court? We can't afford to lose any more money - this has already eaten up our savings and we also had to borrow money. We have gotten written statements from all the repair and testing people saying what caused this problem- which was faulty installation of an inadequate furnace. Help!<HR></BLOCKQUOTE>

If you accepted the inspectors returned fee and cashed check, then he would no longer be liable. It nulls his contract.

 

[judy7644]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by HomeGuru:
You have claims due to misrepresentation and nondisclosure. File against the Seller and real estate agent. The home inspector may also be liable but I would need more details.<HR></BLOCKQUOTE>

 

[judy7644]

the home inspector's disclaimer states he is not responsible for reporting code violations or adequacies, anything that has to be opened up or anything that doesn't have 30 inches clearance.

I think he had an obligation, if not to report the code violations in the installation of the furnace and water heater, at least to report the danger of explosion and visible previous water damage in the utility closet. Do you think those expectations are reasonable and should be pursued?

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by homedoc:
If you accepted the inspectors returned fee and cashed check, then he would no longer be liable. It nulls his contract.

<HR></BLOCKQUOTE>

I do not agree unless the buyer/client agreed, accepted and signed a waiver of liability and indemnification to let the home inspector off the hook. The acceptance of the returned and refunded inspection fee may be construed by the buyer as a partial payment towards the total liability. The limit of liability clause may not stand up due to gross negligence on the part of the home inspector. The limit of liability clause may be unenforceable depending on respective State laws. If the limit of liability clause was allowed to stand, home inspectors could fail to perform up to the best of their abilities and disreguard the following of national home inspection standards of practice. If they screwed up, "Hey no problem Mr. and Mrs. Buyers, I'll send a refund check in the mail". I have been involved in cases against home inspectors where the limit of liability clause was used to escape liability. Somehow the arbitrator, judge and jury in the various cases deemed it fair to strike down the clause due to gross negligence on the part of the home inspector. It just did not seem fair to the home buyers, for the home inspector to get off free and easy by just paying an inspection fee refund of $300-400. Especially when the home inspector missed structural, foundation, soil/drainage problems that would cost $20,000-$175,000 to fix. Home inspectors need to be held accountable and can not use and hide behind the limit of liablilty clause as a defense for grossly negligently performed home inspections.
How come I have not seen this similar limitation of liability clauses in contracts for legal, medical and other services. Opps sorry I lost your $2.5 million case because I forgot to file the answer to the complaint. No problem, I'll refund my legal fees. Oh my, I amputated your leg by accident because the patient charts got mixed up. That's ok. I'll refund all you medical costs after the HMO pays me.

Notwithstanding, the acceptance of a refund of the inspection fee does not void the inspection agreement.

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by judy7644:
the home inspector's disclaimer states he is not responsible for reporting code violations or adequacies, anything that has to be opened up or anything that doesn't have 30 inches clearance.

I think he had an obligation, if not to report the code violations in the installation of the furnace and water heater, at least to report the danger of explosion and visible previous water damage in the utility closet. Do you think those expectations are reasonable and should be pursued? <HR></BLOCKQUOTE>

According to the Standards of Practice that home inspectors follow (or don't follow in your case), the inspection for building code violations is excluded. That does not exempt the inspector though from inspecting the component to verify proper installation, serviceable performance and normal operating and physical condition with respect to age, maintenance and use. Even if the component is not to code, the inspector should have flagged it and reported that "the component was not installed in accordance with industry standards, is a hazard and buyer should hire a licensed plumbing and HVAC contractor for further investigation of the water heater and furnance respectively"

If the inspector did not inspect a component due to inaccessibility, this should have been noted on the inspection report " did not inspect the furnance due to limited clearance, water heater not inspected as it was in an enclosed closed with the doors nailed shut etc." That way, you would be aware of what components were not inspected and what components were.

If in fact you do have the S. toxic mold, that is more of a reason to pursue this case. Please have the mold removed ASAP as I have knowledge that this type of mold causes health problems some irreversible.

[This message has been edited by HomeGuru (edited August 04, 2000).]

 

[judy7644]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by judy7644:
<HR></BLOCKQUOTE>
We finally heard from the attorney for the seller's realtor, who claims that under Arizona State law the realtor is not responsible for what information the seller put on the disclosure form, and if we sue they will seek recovery of all costs to defend against the action. Are these folks bluffing to get us to back off, or, is it true that the realtor has no legal resonsibility in Arizona for the information the seller puts on the property disclosure form?




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[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by judy7644:

Originally posted by judy7644:
<HR></BLOCKQUOTE>
We finally heard from the attorney for the seller's realtor, who claims that under Arizona State law the realtor is not responsible for what information the seller put on the disclosure form, and if we sue they will seek recovery of all costs to defend against the action. Are these folks bluffing to get us to back off, or, is it true that the realtor has no legal resonsibility in Arizona for the information the seller puts on the property disclosure form?

The attorney is correct to a degree. The Realtor is not responsible for what the Seller wrote on the disclosure statement. That does not relieve the Realtor though of all responsibility and liability with respect to the disclosure by the Seller. The Realtor has a duty to read the disclosure statement and to confirm, inquire and investigate as to the facts. If the Realtor knows something on the disclosure statement to be untrue or omitted, the Realtor has a responsibility to inform the Seller to update the disclosure statement. If the Seller refuses, the Realtor has an obligation to inform the Buyer and the Buyer's Realtor in writing, as to the new disclosure information. In your case, if the Realtor indeed was not aware of the problems, then the Realtor is not responsible. This could be a situation where the Seller's knew of the problems but did not tell the Realtor. My opinion would be that the Realtor for the Seller should have gone a step further to confirm that the respective water heater and furnance appliances were as the Seller stated. This task would have been to ask the Seller for copies of the respective invoices and warranties to prove that these appliances were in fact installed by licensed contractors. Upon receipt of these documents, the Realtor could verify the licensing status of the contractors, the age of the appliances (if new or used) and forward all documents to the Buyer as part of the disclosure information. This would be especially crtical being that the Seller stated that the appliances were not that old.
You or your own Realtor could have asked for this information and conducted your own investigation. If no invoices or contracts could be furnished to prove that the appliances were installed by licensed contractors, then you have several options:
1) Have the home inspector especially check these items
2) hire a separate appliance contractor to conduct a thorough inspection
3) accept the appliances in as-is condition.

In your situation, it appears that the Seller is mostly at fault, so your claims should be against the Seller. If you feel that the Realtor may also be at fault, discuss this with your legal counsel.

For further information check these websites out:
www.realtor.com (go to about nar, then consumer faq's, then code of ethics. This is the National Asociation of Realtors Code of Ehtics)
www.ashi.com (do a search with the keywords standards of practice. This is the American Society of Home Inspectors Standards of Practice)

If you have additional questions and/or comments, please continue to post.