Rescinding a real estate purchase due to sellers disclosure issues

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investuntilimrich
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by investuntilimrich »

Be careful about litigation attorneys and their promises. Often it will take ten times longer, cost ten times as much as they lead you to believe. After you've wasted an unbelievable amount of time and money, they will probably end up saying you should settle lol I wish I were kidding but it's been rather consistent in my experience dealing with attorneys in all kinds of litigation. I just don't trust them and I do not think you should either.

Best advice would be to settle for a reasonable amount and not proceed to litigation but threaten it to get them to the table with a good offer. Home values have risen in the past 18 months nationally yes. Your specific area, you'd need to research. If it proceeded to trial and the defendant lost, it would truly cost them an arm and a leg and may bankrupt them, so they cannot simply ignore your requests. It may be in your best interest to determine what kind of assets they have. If they are up to their eyeballs in debt with no assets, you might have to reconsider your options, too.

Other means of pursuing this would be the title insurance you and your broker purchased. Perhaps they would provide an attorney to seek resolution in which case the time might be long but the costs are not of your concern until they exceed the maximum coverage. Finally, you could try putting in an insurance claim if something is broken and non-functional but given the circumstances it's hard to say how that's going to work out and it sounds as if the items are functional but incorrect so I think you're out of luck there.
Fungible
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by Fungible »

investuntilimrich wrote: Wed May 15, 2024 9:44 am Be careful about litigation attorneys and their promises. Often it will take ten times longer, cost ten times as much as they lead you to believe. After you've wasted an unbelievable amount of time and money, they will probably end up saying you should settle lol I wish I were kidding but it's been rather consistent in my experience dealing with attorneys in all kinds of litigation. I just don't trust them and I do not think you should either.
This.

In many contexts... when people talk about suing somebody, it always leads me to think that they haven't sued enough people. And... full disclosure -- I was previously married to an attorney.

It's rarely great and glorious victory -- even when you win.

And often, clients feel like the attorney didn't actually do that much beyond drawing up some papers and going to court -- yet charged fees can be shockingly high. And in my estimation, those client feelings/beliefs are often correct.

And the psychic, emotional, time & energy costs can go way beyond what some people consider.

But... there are some slam dunks where you go to court effectively to just to get a figure for damages, etc... In that case, it may be worth it.
barnaclebob
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by barnaclebob »

rule of law guy wrote: Tue May 14, 2024 7:22 pm every RE transaction I have been involved in was done on an "as is" basis, no survival of any reps/warranties. was this not your case?
"As is" doesn't absolve sellers who knowingly lied on the disclosure's. It just means that a house sold in good faith doesn't have any kind of warranty.
mikejuss
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by mikejuss »

This is weird, OP. You bought the house 2 years ago and now want to renege on the purchase? I'm surprised that all the un-permitted work was not caught and certified at the point of purchase.
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mikejuss
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by mikejuss »

popoki wrote: Tue May 14, 2024 12:45 pm Home inspections are not for ensuring that existing construction conforms to current/historic building codes or that previous work was properly permitted or in conformance with zoning, setbacks, HOA restrictions, etc.
This kind of due diligence is very standard for a buyer's broker to perform. Perhaps the OP did not use a broker.
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mikejuss
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by mikejuss »

Hayduke wrote: Tue May 14, 2024 11:01 am We purchased a home in late 2022 and have discovered significant unpermitted work that the sellers did not disclose.
The seller's don't need to disclose un-permitted work: your broker needs to pull the municipal files on the house and compared them against the house's current layout. If there are discrepancies, they then need to be addressed by the seller. I walked away from a purchase a few years ago because of an un-permitted bathroom that the seller did not want to get a permit for; it was pretty easy to compare the municipal record against the updated layout.
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stan1
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by stan1 »

mikejuss wrote: Wed May 15, 2024 10:55 am
Hayduke wrote: Tue May 14, 2024 11:01 am We purchased a home in late 2022 and have discovered significant unpermitted work that the sellers did not disclose.
The seller's don't need to disclose un-permitted work: your broker needs to pull the municipal files on the house and compared them against the house's current layout. If there are discrepancies, they then need to be addressed by the seller. I walked away from a purchase a few years ago because of an un-permitted bathroom that the seller did not want to get a permit for; it was pretty easy to compare the municipal record against the updated layout.
That's state and location specific. In some states a seller would be asked on a standard disclosure form if there is unpermitted work.
mikejuss
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by mikejuss »

stan1 wrote: Wed May 15, 2024 10:59 am
mikejuss wrote: Wed May 15, 2024 10:55 am
Hayduke wrote: Tue May 14, 2024 11:01 am We purchased a home in late 2022 and have discovered significant unpermitted work that the sellers did not disclose.
The seller's don't need to disclose un-permitted work: your broker needs to pull the municipal files on the house and compared them against the house's current layout. If there are discrepancies, they then need to be addressed by the seller. I walked away from a purchase a few years ago because of an un-permitted bathroom that the seller did not want to get a permit for; it was pretty easy to compare the municipal record against the updated layout.
That's state and location specific. In some states a seller would be asked on a standard disclosure form if there is unpermitted work.
Any real-estate broker or lawyer who's good is going to look into these matters; it's not difficult at all. It sounds like the OP didn't have a broker.
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runninginvestor
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by runninginvestor »

mikejuss wrote: Wed May 15, 2024 11:00 am
stan1 wrote: Wed May 15, 2024 10:59 am
mikejuss wrote: Wed May 15, 2024 10:55 am
Hayduke wrote: Tue May 14, 2024 11:01 am We purchased a home in late 2022 and have discovered significant unpermitted work that the sellers did not disclose.
The seller's don't need to disclose un-permitted work: your broker needs to pull the municipal files on the house and compared them against the house's current layout. If there are discrepancies, they then need to be addressed by the seller. I walked away from a purchase a few years ago because of an un-permitted bathroom that the seller did not want to get a permit for; it was pretty easy to compare the municipal record against the updated layout.
That's state and location specific. In some states a seller would be asked on a standard disclosure form if there is unpermitted work.
Any real-estate broker or lawyer who's good is going to look into these matters; it's not difficult at all. It sounds like the OP didn't have a broker.
OP also indicated that the seller's report in their transaction had a section about whether unpermitted work has been done:
viewtopic.php?p=7868577#p7868577
mikejuss
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by mikejuss »

runninginvestor wrote: Wed May 15, 2024 11:05 am
mikejuss wrote: Wed May 15, 2024 11:00 am
stan1 wrote: Wed May 15, 2024 10:59 am
mikejuss wrote: Wed May 15, 2024 10:55 am
Hayduke wrote: Tue May 14, 2024 11:01 am We purchased a home in late 2022 and have discovered significant unpermitted work that the sellers did not disclose.
The seller's don't need to disclose un-permitted work: your broker needs to pull the municipal files on the house and compared them against the house's current layout. If there are discrepancies, they then need to be addressed by the seller. I walked away from a purchase a few years ago because of an un-permitted bathroom that the seller did not want to get a permit for; it was pretty easy to compare the municipal record against the updated layout.
That's state and location specific. In some states a seller would be asked on a standard disclosure form if there is unpermitted work.
Any real-estate broker or lawyer who's good is going to look into these matters; it's not difficult at all. It sounds like the OP didn't have a broker.
OP also indicated that the seller's report in their transaction had a section about whether unpermitted work has been done:
viewtopic.php?p=7868577#p7868577
Again, this is a matter best left to the buyer's--not the seller's--broker and attorney.
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Northern Flicker
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by Northern Flicker »

mikejuss wrote: Wed May 15, 2024 10:46 am
popoki wrote: Tue May 14, 2024 12:45 pm Home inspections are not for ensuring that existing construction conforms to current/historic building codes or that previous work was properly permitted or in conformance with zoning, setbacks, HOA restrictions, etc.
This kind of due diligence is very standard for a buyer's broker to perform. Perhaps the OP did not use a broker.
A broker and home inspector can only evaluate what they can see. If it is clear work requiring a permit was done, one can check that permits were pulled and closed, but if say a homeowner did their own electrical wiring without a permit, it may be hard to know. The wires are behind drywall, and a fixture or outlet may have been in place when the house was built, or added by a homeowner.
mikejuss
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by mikejuss »

Northern Flicker wrote: Wed May 15, 2024 12:05 pm
mikejuss wrote: Wed May 15, 2024 10:46 am
popoki wrote: Tue May 14, 2024 12:45 pm Home inspections are not for ensuring that existing construction conforms to current/historic building codes or that previous work was properly permitted or in conformance with zoning, setbacks, HOA restrictions, etc.
This kind of due diligence is very standard for a buyer's broker to perform. Perhaps the OP did not use a broker.
A broker and home inspector can only evaluate what they can see. If it is clear work requiring a permit was done, one can check that permits were pulled and closed, but if say a homeowner did their own electrical wiring without a permit, it may be hard to know. The wires are behind drywall, and a fixture or outlet may have been in place when the house was built, or added by a homeowner.
Did the OP mention hidden un-permitted work being a problem?
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rule of law guy
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by rule of law guy »

barnaclebob wrote: Wed May 15, 2024 10:27 am
rule of law guy wrote: Tue May 14, 2024 7:22 pm every RE transaction I have been involved in was done on an "as is" basis, no survival of any reps/warranties. was this not your case?
"As is" doesn't absolve sellers who knowingly lied on the disclosure's. It just means that a house sold in good faith doesn't have any kind of warranty.
in NY you can omit any and all disclosures for a $500 deduct from agreed selling price...which every seller does
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rkhusky
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by rkhusky »

For me it wouldn’t be about unpermitted work or unlicensed contractors, it would be about if changes are necessary due to safety, city requirements (ie being forced to make changes now or be fined), or neighbors are planning to sue.
Northern Flicker
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by Northern Flicker »

mikejuss wrote: Wed May 15, 2024 12:08 pm
Northern Flicker wrote: Wed May 15, 2024 12:05 pm
mikejuss wrote: Wed May 15, 2024 10:46 am
popoki wrote: Tue May 14, 2024 12:45 pm Home inspections are not for ensuring that existing construction conforms to current/historic building codes or that previous work was properly permitted or in conformance with zoning, setbacks, HOA restrictions, etc.
This kind of due diligence is very standard for a buyer's broker to perform. Perhaps the OP did not use a broker.
A broker and home inspector can only evaluate what they can see. If it is clear work requiring a permit was done, one can check that permits were pulled and closed, but if say a homeowner did their own electrical wiring without a permit, it may be hard to know. The wires are behind drywall, and a fixture or outlet may have been in place when the house was built, or added by a homeowner.
Did the OP mention hidden un-permitted work being a problem?
Yes.
Hayduke, the OP wrote: We purchased a home in late 2022 and have discovered significant unpermitted work that the sellers did not disclose. Think unpermitted bathrooms, water/gas/sewer lines, HVAC and electrical systems.
Amien
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by Amien »

Just to note: “meets code” in single-family houses generally means compliant to code requirements at time work was done. Doesn’t mean house must meet all current code requirements; nearly all governing building code enforcement agencies allow existing non-compliant elements to remain in place until new renovation work occurs within that specific area where non compliant condition exists. “Not to code” doesn’t necessarily mean “unsafe” nor “rip out and reconstruct”.

Also, many large cities pay scant attention to many home-remodeling, including basement conversions, decks and porches, even free-standing garages in our big city.

A lot of single-family work will occur without requiring or obtain building permit: bathroom and kitchen “refresh” renovations where fixtures, cabinets, lighting, and flooring is replaced.

Lot of sellers aren’t aware of issues with their houses beyond what can be discerned by naked eye. Basement flooding due to sewer backup is routine experience in our city at every major “100-year” rainstorm event, now happening every other year. Experienced homeowners limit use of basement and keep washer/dryer on 12” platforms and screw-seal floor drains. Our city has combined sewers, meaning single storm and sanitary sewer pipe in street. Not homeowners’ code problem, innate city problem.

OP hasn’t flagged what specific problem there is.
TN_Boy
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by TN_Boy »

Amien wrote: Wed May 15, 2024 4:49 pm Just to note: “meets code” in single-family houses generally means compliant to code requirements at time work was done. Doesn’t mean house must meet all current code requirements; nearly all governing building code enforcement agencies allow existing non-compliant elements to remain in place until new renovation work occurs within that specific area where non compliant condition exists. “Not to code” doesn’t necessarily mean “unsafe” nor “rip out and reconstruct”.

Also, many large cities pay scant attention to many home-remodeling, including basement conversions, decks and porches, even free-standing garages in our big city.

A lot of single-family work will occur without requiring or obtain building permit: bathroom and kitchen “refresh” renovations where fixtures, cabinets, lighting, and flooring is replaced.

Lot of sellers aren’t aware of issues with their houses beyond what can be discerned by naked eye. Basement flooding due to sewer backup is routine experience in our city at every major “100-year” rainstorm event, now happening every other year. Experienced homeowners limit use of basement and keep washer/dryer on 12” platforms and screw-seal floor drains. Our city has combined sewers, meaning single storm and sanitary sewer pipe in street. Not homeowners’ code problem, innate city problem.

OP hasn’t flagged what specific problem there is.
The OP has stated they don't want to give too many details, but has said:
I am not sure how specific I should be on a public forum for the sake of argument assume there are egregious health and safety issues regarding gas lines and sewer lines that violate building codes and common sense.
The OP has also stated that it will cost something like 15% of the purchase price (purchase was high six figures) to fix. Now, we don't know exactly what that estimate is based on (contractor evaluation?). And there are not well described issues with the neighbors.

Thus, though we lack some details, we have a house with extensive unpermitted work where at least some of the work is not safe. I'm taking the OP's word on this, and given that the seller did not disclose the work previously and is now willing to buy the house back, I believe them.

If the quality of the gas line and sewer line work really is poor, I'd worry that things behind drywall in the renovations are also poor quality. Why wouldn't I worry about that?
ETK517
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by ETK517 »

I am a lawyer and have had similar cases involving false representations in connection with the purchase of real estate. Without knowing the specifics, my general impression is that rescission combined with some compensation for damages (moving/closing costs, etc.) plus an indemnification from the seller for any claims related to your ownership of the property (to capture claims by the town or neighbor) would be an incredible deal and one I'd jump at if you can find replacement housing. I agree with those who think it's fishy that the seller is even offering rescission, but to me that suggests there may be even more serious latent issues or potential liabilities lurking here that they don't want you to discover. Given that, I'd be uncomfortable entering into a monetary settlement which would require a release of all potential claims against the seller.
Nowizard
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by Nowizard »

The costs include your time an aggravation. It also occurs that the selling Realtor, assuming one was involved, should have obtained information regarding necessary disclosures, likely including a signature from seller of having done so. If so, then there is a paper trail that is very detrimental to any seller effort to short-change the process. Obviously, your choice of what costs to incur, particularly when they are uncertain. Personally, if staying, we would require an iron-clad agreement that the costs would be covered by the seller totally. That would require the seller's involvement in choice of contractors as should have occurred prior to listing the property. Similarly, all related costs of eliminating the original contract should be paid by the seller. The listing Realtor may have a role in the decisions as well.

Tim
LotsaGray
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by LotsaGray »

TN_Boy wrote: Thu May 16, 2024 8:07 am
Amien wrote: Wed May 15, 2024 4:49 pm Just to note: “meets code” in single-family houses generally means compliant to code requirements at time work was done. Doesn’t mean house must meet all current code requirements; nearly all governing building code enforcement agencies allow existing non-compliant elements to remain in place until new renovation work occurs within that specific area where non compliant condition exists. “Not to code” doesn’t necessarily mean “unsafe” nor “rip out and reconstruct”.

Also, many large cities pay scant attention to many home-remodeling, including basement conversions, decks and porches, even free-standing garages in our big city.

A lot of single-family work will occur without requiring or obtain building permit: bathroom and kitchen “refresh” renovations where fixtures, cabinets, lighting, and flooring is replaced.

Lot of sellers aren’t aware of issues with their houses beyond what can be discerned by naked eye. Basement flooding due to sewer backup is routine experience in our city at every major “100-year” rainstorm event, now happening every other year. Experienced homeowners limit use of basement and keep washer/dryer on 12” platforms and screw-seal floor drains. Our city has combined sewers, meaning single storm and sanitary sewer pipe in street. Not homeowners’ code problem, innate city problem.

OP hasn’t flagged what specific problem there is.
The OP has stated they don't want to give too many details, but has said:
I am not sure how specific I should be on a public forum for the sake of argument assume there are egregious health and safety issues regarding gas lines and sewer lines that violate building codes and common sense.
The OP has also stated that it will cost something like 15% of the purchase price (purchase was high six figures) to fix. Now, we don't know exactly what that estimate is based on (contractor evaluation?). And there are not well described issues with the neighbors.

Thus, though we lack some details, we have a house with extensive unpermitted work where at least some of the work is not safe. I'm taking the OP's word on this, and given that the seller did not disclose the work previously and is now willing to buy the house back, I believe them.

If the quality of the gas line and sewer line work really is poor, I'd worry that things behind drywall in the renovations are also poor quality. Why wouldn't I worry about that?
I will make a counter point. If the issues are truly egregious and significant safety concerns while is op still in the house? Why hasn’t city stepped in immediately? Why hasn’t neighbor under threat sued? Why is city allowing occupation? Would you remain in a house with egregious gas line safety issues?

It could be hyperbole or ignorance or perfectly correct descriptions. The readers of this thread really do not know.
dagsboro
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by dagsboro »

Does this discussion about a very messy and frustrating real estate transaction entice some into offering their homes for sale "as is? " Or, maybe even donating the house to a reputable charity. I would be interested in what the members of this forum think about both those ideas - even though maximizing net profit may be the deciding factor 99.9% of the time.
toddthebod
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by toddthebod »

dagsboro wrote: Thu May 16, 2024 9:27 am Does this discussion about a very messy and frustrating real estate transaction entice some into offering their homes for sale "as is? " Or, maybe even donating the house to a reputable charity. I would be interested in what the members of this forum think about both those ideas - even though maximizing net profit may be the deciding factor 99.9% of the time.
"As is" does not absolve you from disclosure requirements.

And while I don't believe unpermitted work is a mortal sin, I would never DIY gas line work. I also wouldn't lie on the seller disclosure form, so I don't think there are any lessons here for sellers.

Buyers, on the other hand, should do more due diligence than seems to have been done in this situation.
Normchad
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by Normchad »

dagsboro wrote: Thu May 16, 2024 9:27 am Does this discussion about a very messy and frustrating real estate transaction entice some into offering their homes for sale "as is? " Or, maybe even donating the house to a reputable charity. I would be interested in what the members of this forum think about both those ideas - even though maximizing net profit may be the deciding factor 99.9% of the time.
I sold my house “as-is”. There wasn’t anything wrong with it. The buyers had an inspection, a radon test, and a termite inspection too. I wasn’t asked to disclose anything. We signed a “non disclosure” document, which said something along the lines of “we make no representations about the condition of the property” or something like that.

Previously when I had sold homes, I do remember going through a long disclosure checklist.

I would love more details though on what the OP is actually dealing with. I just can’t imagine somebody doing sewer work, etc. and how do you do an unsafe gas line? Run it through garden hose? Run it through the fireplace?

The whole thing is fascinating and fishy at the same time. It’s hard for me to imagine a house could have so many egregious problems, and a buyer wouldn’t sense it during the inspection period. I know wires are behind walls, etc. but when people do stuff badly, they do everything badly and it shows. They’re not doing great finish work if they can’t even do a gas line remotely correctly.

But that the sellers are willing to take it back. They’re probably scared of going to court, so something juicy is afoot.
Last edited by Normchad on Thu May 16, 2024 9:52 am, edited 1 time in total.
smooth_rough
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by smooth_rough »

As others mentioned, rescinding contract after significant amount of time has passed doesn't make sense on the face of it. Market conditions can change. Interest rates can change. There is the normal depreciation on any property that has occurred over time. Its not possible to go back in time and recreate those market conditions. Rescinding contract is more feasible within 30 days for example, just for illustration.

Don't know what state laws apply there. For example some states might have 4 years from time of purchase for buyer to make claims against seller for failure to disclose. But if you are within your allowed window of time, you might try to sue the seller for failure to disclose known defects, if that was required in the purchase contract, if you have good reason to believe that is indeed what happened. Keep in mind that seller might not be liable, if seller can claim they don't know about the defect.

It is always smart for buyers to hire their own home inspection service to crawl over the property during escrow period, to properly advise the buyer before closing sale. Worst case scenario, your inspection team discovers something you can't live with, and you drop the deal, and fight over security deposit.
Last edited by smooth_rough on Thu May 16, 2024 9:58 am, edited 1 time in total.
TN_Boy
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by TN_Boy »

LotsaGray wrote: Thu May 16, 2024 9:23 am
TN_Boy wrote: Thu May 16, 2024 8:07 am
Amien wrote: Wed May 15, 2024 4:49 pm Just to note: “meets code” in single-family houses generally means compliant to code requirements at time work was done. Doesn’t mean house must meet all current code requirements; nearly all governing building code enforcement agencies allow existing non-compliant elements to remain in place until new renovation work occurs within that specific area where non compliant condition exists. “Not to code” doesn’t necessarily mean “unsafe” nor “rip out and reconstruct”.

Also, many large cities pay scant attention to many home-remodeling, including basement conversions, decks and porches, even free-standing garages in our big city.

A lot of single-family work will occur without requiring or obtain building permit: bathroom and kitchen “refresh” renovations where fixtures, cabinets, lighting, and flooring is replaced.

Lot of sellers aren’t aware of issues with their houses beyond what can be discerned by naked eye. Basement flooding due to sewer backup is routine experience in our city at every major “100-year” rainstorm event, now happening every other year. Experienced homeowners limit use of basement and keep washer/dryer on 12” platforms and screw-seal floor drains. Our city has combined sewers, meaning single storm and sanitary sewer pipe in street. Not homeowners’ code problem, innate city problem.

OP hasn’t flagged what specific problem there is.
The OP has stated they don't want to give too many details, but has said:
I am not sure how specific I should be on a public forum for the sake of argument assume there are egregious health and safety issues regarding gas lines and sewer lines that violate building codes and common sense.
I agree with everything you say, except that as the seller has offered

The OP has also stated that it will cost something like 15% of the purchase price (purchase was high six figures) to fix. Now, we don't know exactly what that estimate is based on (contractor evaluation?). And there are not well described issues with the neighbors.

Thus, though we lack some details, we have a house with extensive unpermitted work where at least some of the work is not safe. I'm taking the OP's word on this, and given that the seller did not disclose the work previously and is now willing to buy the house back, I believe them.

If the quality of the gas line and sewer line work really is poor, I'd worry that things behind drywall in the renovations are also poor quality. Why wouldn't I worry about that?
I will make a counter point. If the issues are truly egregious and significant safety concerns while is op still in the house? Why hasn’t city stepped in immediately? Why hasn’t neighbor under threat sued? Why is city allowing occupation? Would you remain in a house with egregious gas line safety issues?

It could be hyperbole or ignorance or perfectly correct descriptions. The readers of this thread really do not know.
I suppose it could be hyperbole, but if I was the seller and the problems did not really exist I don't think this would have happened:
The sellers have recently floated the idea of rescission where we would effectively unwind the purchase and restore both parties to where they were prior to entering the purchase contract
The seller lied on the disclosure form. That would matter to me, along with the discovery of much unpermitted work that does not meet code. I agree we do not have substantial detail and I was also curious about how unsafe things were if the OP is still living there (no, I wouldn't stay in a house with egregious gas line safety problems). Also, where did the cost estimate come from?

However, the combination of lying on the disclosure form and the seller offering to unwind the purchase are the points that would lead me to mostly believe the OP. This does not sound like a "new homeowner can't deal with the usual run of house problems" to me.

If the local authorities get involved, I suspect the problem becomes harder to solve, not easier (they might insist the OP fix things ASAP, as the OP is the current owner). That doesn't mean they should not be involved. I'd bail, unless the OP is wildly exaggerating, but that seems unlikely.
mikejuss
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by mikejuss »

Normchad wrote: Thu May 16, 2024 9:46 am The whole thing is fascinating and fishy at the same time. It’s hard for me to imagine a house could have so many egregious problems, and a buyer wouldn’t sense it during the inspection period. I know wires are behind walls, etc. but when people do stuff badly, they do everything badly and it shows.
+1.
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TN_Boy
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by TN_Boy »

smooth_rough wrote: Thu May 16, 2024 9:47 am As others mentioned, rescinding contract after significant amount of time has passed doesn't make sense on the face of it. Market conditions can change. Interest rates can change. There there is the normal depreciation on any property that has occurred over time. Its not possible to go back in time and recreate those market conditions. Rescinding contract is more feasible within 30 days for example, just for illustration.

Don't know what state laws apply there. For example some states might have 4 years from time of purchase for buyer to make claims against seller for failure to disclose. But if you are within your allowed window of time, you might try to sue the seller for failure to disclose known defects, if that was required in the purchase contract, if you have good reason to believe that is indeed what happened. Keep in mind that seller might not be liable, if seller can claim they don't know about the defect.

It is always smart for buyers to hire their own home inspection service to crawl over the property during escrow period, to properly advise the buyer before closing sale. Worst case scenario, your inspection team discovers something you can't live with, and you drop the deal, and fight over security deposit.
How could the seller who is not a contractor claim innocence if they did the unpermitted work not meeting code that is the problem? ("I didn't know what I was doing, so I did it wrong and was unaware of the problem. It looked good to me!").

I also have no idea how rescission would work, but suing the seller sounds like an expensive and potentially time-consuming way to deal with the problem of large issues to resolve.
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by TN_Boy »

toddthebod wrote: Thu May 16, 2024 9:33 am
dagsboro wrote: Thu May 16, 2024 9:27 am Does this discussion about a very messy and frustrating real estate transaction entice some into offering their homes for sale "as is? " Or, maybe even donating the house to a reputable charity. I would be interested in what the members of this forum think about both those ideas - even though maximizing net profit may be the deciding factor 99.9% of the time.
"As is" does not absolve you from disclosure requirements.

And while I don't believe unpermitted work is a mortal sin, I would never DIY gas line work. I also wouldn't lie on the seller disclosure form, so I don't think there are any lessons here for sellers.

Buyers, on the other hand, should do more due diligence than seems to have been done in this situation.
Not arguing, but what due diligence wasn't done? They had an inspector which didn't catch *any* of this (which is interesting). What other steps should been taken?
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by toddthebod »

TN_Boy wrote: Thu May 16, 2024 9:57 am
toddthebod wrote: Thu May 16, 2024 9:33 am
dagsboro wrote: Thu May 16, 2024 9:27 am Does this discussion about a very messy and frustrating real estate transaction entice some into offering their homes for sale "as is? " Or, maybe even donating the house to a reputable charity. I would be interested in what the members of this forum think about both those ideas - even though maximizing net profit may be the deciding factor 99.9% of the time.
"As is" does not absolve you from disclosure requirements.

And while I don't believe unpermitted work is a mortal sin, I would never DIY gas line work. I also wouldn't lie on the seller disclosure form, so I don't think there are any lessons here for sellers.

Buyers, on the other hand, should do more due diligence than seems to have been done in this situation.
Not arguing, but what due diligence wasn't done? They had an inspector which didn't catch *any* of this (which is interesting). What other steps should been taken?
I would think "unpermitted bathrooms" (plural) would be something you would uncover. Public records typically include number (and often size) of bedrooms and bathrooms in the house. Presumably there would be an obvious discrepancy.
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Re: Rescinding a real estate purchase due to sellers disclosure issues

Post by TN_Boy »

toddthebod wrote: Thu May 16, 2024 10:08 am
TN_Boy wrote: Thu May 16, 2024 9:57 am
toddthebod wrote: Thu May 16, 2024 9:33 am
dagsboro wrote: Thu May 16, 2024 9:27 am Does this discussion about a very messy and frustrating real estate transaction entice some into offering their homes for sale "as is? " Or, maybe even donating the house to a reputable charity. I would be interested in what the members of this forum think about both those ideas - even though maximizing net profit may be the deciding factor 99.9% of the time.
"As is" does not absolve you from disclosure requirements.

And while I don't believe unpermitted work is a mortal sin, I would never DIY gas line work. I also wouldn't lie on the seller disclosure form, so I don't think there are any lessons here for sellers.

Buyers, on the other hand, should do more due diligence than seems to have been done in this situation.
Not arguing, but what due diligence wasn't done? They had an inspector which didn't catch *any* of this (which is interesting). What other steps should been taken?
I would think "unpermitted bathrooms" (plural) would be something you would uncover. Public records typically include number (and often size) of bedrooms and bathrooms in the house. Presumably there would be an obvious discrepancy.
Ah, good point. You check the property description in the tax records against the current house description. And then you look for permits for the bathroom work.

I wonder if agents/buyers typically do that? I guess they should would be your point :-).
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