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Disclosure by seller

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

I have been reading here for a while, and have a question about a situation my mom has. This is not a homework assignment, it’s a real life situation.

My mom bought a rental house just over a year ago. It was $1,200 shy of a full price offer with no contingencies, her money was good, and they closed in 30 days. The seller’s wife was the real estate agent, she lived in the house with him for several months. Mom had the house inspected prior to closing so she could educate herself on its condition before any tenants move in.

Tenants move in, and the very first night, one of them takes a shower in the basement bathroom. The drain fails, and the bathroom ends up with approximately 5 gallons of water on the floor. Upon inspection, it is discovered the shower unit is improperly installed. The base of the shower unit was placed over a small circular floor drain, but the drain was never properly attached to the drain pipe, the water simply drained into the floor drain. The floor drain was plugged with hair, and would not allow the volume of water produced in a normal shower to drain quickly enough. As a result, the space beneath the shower unit filled with water and that water seeped under the shower unit out into the bathroom.

She notified the seller, and they claimed they didn’t know the problem existed. They told her since she "got a discount," had the home inspected, and agreed to the as-is clause on the disclosure they provided, she was SOL, and would have to eat the $2,800 plumbing bill.

I did some research, and found a case (Bauer v. Giannis, 350 Ill. App.3d 897, 834 N.E.2d 952, 269 Ill. Dec. 147) whereby the appellate court sided with the buyer, and among other things, agreed with a previous ruling that: “The form defines an "as is" agreement as one "for the sale of the property subject to any or all material defects disclosed in this report." (Emphasis added.)”

There is more in Bauer v. Giannis that I believe to be relevant, but in effort to shorten the post, I’ll stop here for now, and pose these questions:

1) Since this condition was discovered the very first time the shower was used, is it reasonable to believe the previous owner knew of this defect and willfully remained silent?

2) Since this was an "agent related" sale, should the seller/realtor be held to a higher standard of care with respect to disclosure than a “regular person”?

Thanks in advance for your comments.
Tim
 
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HomeGuru

Senior Member
What is the name of your state (only U.S. law)? Illinois

I have been reading here for a while, and have a question about a situation my mom has. This is not a homework assignment, it’s a real life situation.

My mom bought a rental house just over a year ago. It was $1,200 shy of a full price offer with no contingencies, her money was good, and they closed in 30 days. The seller’s wife was the real estate agent, she lived in the house with him for several months. Mom had the house inspected prior to closing so she could educate herself on its condition before any tenants move in.

Tenants move in, and the very first night, one of them takes a shower in the basement bathroom. The drain fails, and the bathroom ends up with approximately 5 gallons of water on the floor. Upon inspection, it is discovered the shower unit is improperly installed. The base of the shower unit was placed over a small circular floor drain, but the drain was never properly attached to the drain pipe, the water simply drained into the floor drain. The floor drain was plugged with hair, and would not allow the volume of water produced in a normal shower to drain quickly enough. As a result, the space beneath the shower unit filled with water and that water seeped under the shower unit out into the bathroom.

She notified the seller, and they claimed they didn’t know the problem existed. They told her since she "got a discount," had the home inspected, and agreed to the as-is clause on the disclosure they provided, she was SOL, and would have to eat the $2,800 plumbing bill.

I did some research, and found a case (Bauer v. Giannis, 350 Ill. App.3d 897, 834 N.E.2d 952, 269 Ill. Dec. 147) whereby the appellate court sided with the buyer, and among other things, agreed with a previous ruling that: “The form defines an "as is" agreement as one "for the sale of the property subject to any or all material defects disclosed in this report." (Emphasis added.)”

There is more in Bauer v. Giannis that I believe to be relevant, but in effort to shorten the post, I’ll stop here for now, and pose these questions:

1) Since this condition was discovered the very first time the shower was used, is it reasonable to believe the previous owner knew of this defect and willfully remained silent?



**A: possibly


########
2) Since this was an "agent related" sale, should the seller/realtor be held to a higher standard of care with respect to disclosure than a “regular person”?



**A: yes.



########
Thanks in advance for your comments.
Tim
**A: no problem.
 

VeronicaLodge

Senior Member
why didnt the inspector find this? he should have ran the water for a decent amount of time to see if there was any drainage problems?
 
why didnt the inspector find this? he should have ran the water for a decent amount of time to see if there was any drainage problems?
That's a great question. I was present during the inspection, and he did check the shower. He ran water in the shower for about 2 minutes, and none of us (there were 4 people there including the inspector) saw any signs of this problem. Unfortunately, none of the rest of us are home inspectors, and had no reason to believe what he did may not have been proper. It seemed like something I would do myself when looking at property.

The good news is the inspection does relieve the seller of their duty to speak. In the case I cited in my original post, the court told us:
To prove fraudulent concealment, a plaintiff must establish that (1) the defendant concealed a material fact under circumstances that created a duty to speak; (2) the defendant intended to induce a false belief; (3) the plaintiff could not have discovered the truth through reasonable inquiry or inspection, or was prevented from making a reasonable inquiry or inspection, and justifiably relied upon the defendant's silence as a representation that the fact did not exist; (4) the concealed information was such that the plaintiff would have acted differently had he or she been aware of it; and (5) the plaintiff's reliance resulted in damages.
 
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MaximumAsh

Junior Member
Does the drain work perfectly fine without hair clogging it? I know you stated it was improperly installed, however if it flowed fine without hair clogging it, is it possible the seller had no idea the problem existed?
 
**A: and why would that be good news?
It's good news because my mom will be the plaintiff.

Does the drain work perfectly fine without hair clogging it? I know you stated it was improperly installed, however if it flowed fine without hair clogging it, is it possible the seller had no idea the problem existed?
I'd say it may be possible, except the problem became obvious the very first time the shower was used. With the number of people that lived in the house, it seems unlikely that in the three years he owned the house nobody ever took a shower in the basement.
 

HomeGuru

Senior Member
It's good news because my mom will be the plaintiff.



I'd say it may be possible, except the problem became obvious the very first time the shower was used. With the number of people that lived in the house, it seems unlikely that in the three years he owned the house nobody ever took a shower in the basement.
**A: litigation is never good news.
 

MaximumAsh

Junior Member
I'd say it may be possible, except the problem became obvious the very first time the shower was used. With the number of people that lived in the house, it seems unlikely that in the three years he owned the house nobody ever took a shower in the basement.
True, but they could argue that the drain was working fine when they last used it, no matter when that was historically. If you had the thing inspected, and you know for a fact the inspector turned the shower on and it drained for several minutes without problems, you might be stuck with the issue. The seller has lots of outs if you can't show they knew about the problem. They could say they rarely used the shower, and when they did it worked fine. They could also claim they take brief showers, and thus never had a problem since the drain may take a long shower to backup.

If you had it inspected and it checked out, you had a final walkthrough and signed off on everything, and if you can't prove they knew about the problem, I'm not sure you have any way to go after them for it. I think the burden is on you (or your mother) to show that it was something hidden from you intentionally. And since inspectors don't even offer a warranty of any kind, you probably can't even go after him either. Might just have to eat this one... but again that's just my 2 cents and I'm not a lawyer.
 

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