Disclosure on real estate damage

[Dan Karachio]

Got an interesting one here. Let me give you a time line:

2001: House on block hit by 80 foot tall Oak tree. The tree broke the main beam of the house/roof and it was condemed until fixed. A lot of damage.
2004: House sold to new neighbors. Damage disclosed.
2009: Neighbors selling house, yet are NOT including damage from 2001 on disclosure statement.

To me this is entirely unethical. Is it also illegal? Their slimey realtor is saying you don't have to disclose things from previous owners. I don't buy it.

I am looking at a new neighbor who will move in and then find out from neighbors that their house was smashed by a tree. Whether the repairs were well done or not (mostly not), how would you like that to be you? I think this is awful. Though I want the house sold, I think it should be on the up and up.

[Scott Shepherd]

I asked a realtor about this several years back. I was told that if they are told about it or know about it, then they must disclose it. That could be a state issue, so it might not apply where you are, and I don't know if that was a law or just their ethics policy.

[Chris Kennedy]

It is definitely unethical, but it does vary a little state-by-state apparently. What I found says that 32 states require full disclosure:

Alaska, Arizona, California, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Michigan, Mississippi, Nebraska, Nevada, New Hampshire, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Virginia, Washington and Wisconsin.

If your state is in the list, the owner is required to by law, but I am guessing that your state isn't in the list since the realtor should know that piece of law. Hopefully any interested party will get a building inspector who will see the problem.

Cheers,

Chris

[Joe Scharle]

North Carolina requires the seller to disclose facts personally known by the seller. The seller is not required to attest to hearsay; nor facts not personally known to the seller. If the current seller took possession of the damaged property and made repairs, then here they would be in possession of disclosable facts. Hope that helps.

[Tom Godley]

From what I have always been told you are required to disclose known defects.

-- I am not sure that I would consider something that has been properly repaired as a current defect.

[Greg Cuetara]

Tom that is exactly my question. If there is damage and it is fixed do you still need to disclose it? I would think any current known defects that need repair need to be disclosed but those that have been fixed don't need to be.

[Dan Karachio]

Thanks all. Yes, our state is on the list. It is not hearsay, other neighbors have vivid memories and even a few pictures of the night the giant oak tree fell on the roof of that house (almost killed one occupant). The current owners are certainly aware of it, but feel this is somehow not worth mentioning. Is there any law to prevent me from mentioning things? Ha, I don't think so.

Well, here is what I say. Whoever buys this house will be my neighbor for a while. I would hate for anyone to buy a house and not know about this. If I can get to any bidders before the sale, I will tell them and suggest their inspector be super qualified for structural and other issues. If I miss and they do sell, I hate to say it, but the new owner will be informed the day they move in.

[John Daugherty]

If it's been fixed what's the big deal? If you look at it that way then should they tell them about every water leak, broken window, or clogged gutter, and any of the many trivial issues that go along with owning a house?

The way I look at it is if it's an issue at the time of sale then that should be disclosed not something that has already been fixed.

[Mike Gager]

im not sure its required to tell if it doesnt currently affect the condition of the house. if the repairs were made and pass inspection what more problems could there be?

you wouldnt need to disclose a hail storm took the roof off the house 3 owners before you why would this be different?

[Matt Meiser]

Since real estate laws and customs are set by locale you need to at least say what state you are in for anyone to give any kind of educated opinion on what the law that actually applies says.

Sounds to me like you could be setting yourself up a for a lawsuit brought on by the current owners by sticking your nose in. Whether you win or not won't matter when you are done paying to defend yourself even if you are legally and/or ethically right. You'd obviously want to know, I'd probably want to know. But if the law says they don't have to disclose it and you interfere in the sale you may find yourself in legal hot water.

We learned something interesting about our last house as we moved out--our neighbor who'd lived across the street his whole life came over to ask us if we knew the history of it. I'd always wondered why the house sat on a concrete block foundation though it obviously predated concrete blocks. I figured at some point it was jacked up and a new foundation put underneath. Well, I was technically right. Except for the part where they moved it about 1-1/2 miles. Apparently it used to sit right about where the median is on US-23. When they cleared the right of way to build the new limited-access highway in the late 40's/early 50's our house was in the way and was moved instead of torn down. Explained all the 50's era electrical, plumbing, coved ceilings, etc. too.

[Dan Karachio]

John and Mike, come on guys. You are talking a nice game here, but if either of you bought a house then found out the second floor was taken out by a 80 foot oak, condemned as uninhabitable, then repaired how would you really feel? How would you feel if your mother or sister bought a house and discovered this later? Do you two also like to buy used cars that nearly totaled and patched together? Give me a break. Now add to this that the quality of the repairs are/were questionable.

Here is the kicker. Any home inspector worth his salt will have to see the new beams once he/she looks in the attic. You would think.

As for getting sued for casually mentioning the time the old oak tree fell on the house - not a chance. "Hi neighbor, how are you. I see you bought that old house. That's a real trooper of a house I understand. Folks here tell me that an old oak tree, (see that big stump?) yep they say that old oak tree fell right on that house one night and almost killed the owner. Oh boy, that must have been one day he woke up all bright eyed and alert. Yep, a big old tree like that and the house somehow is still standing. Amazing, or so they tell me."

[Cliff Rohrabacher]

That could be a state issue, .

Indeed this is exactly correct.

All states have their own laws on this sort of thing.
The OP needs a lawyer.

[Dan Karachio]

Actually, I have a lawyer in the family, and our state law is clear - full disclosure. Still, I'm leaving it to another neighbor who is now confronting the realtor and owner with the simple fact that via normal neighborly conversation whoever buys that house is going to find out, sooner or later, about the tree damage. Rather than deal with one p'od buyer later, why not just deal with it up front? It is the honest thing to do. Thanks for all the advice.

Oh, get this. Someone is thinking of posting a picture of the tree on the house in Google Maps, tagged right to the address, with a story about the event that woke up the block!

[Walt Nicholson]

Your first sentence said "condemmed until repaired" That would mean to me that it was unsafe to live in until someone repaired it properly and it met the city/state, etc. inspectors approval for repairs. Thousands of people live in houses that have been in the same situation from storms, floods, tornadoes, etc. and have perfectly sound homes. If your chair leg breaks and the chair is unsafe to sit in, a guy in a workshop can make it "good as new" again in short order without having to tell the guy that buys it someday in the future at the garage sale that "once upon a time" that chair was condemmed as unsafe. Not trying to be a smart "you know what" but if the work was done right the house might be better now than it was before the tree fell with better framing, materials, etc. Just my 2 cents worth. :)

[Dan Karachio]

Walt, yes that is absolutely true. Who knows, these repairs could make the house better than any other on the block, or it could be a structural nightmare waiting to happen, but I think it is a completely separate issue than disclosing it. The law and a sense of honesty say he must be disclosing this, but he is not. I will mind my own business, but it is shoddy and dishonest.

Maybe I am a freak. I have the most detailed spreadsheet of every single thing I am doing to my house including the work, date, who did it (me or a contractor) and the cost. It also includes historical information from when I bought the house. For example, minor termite damage in the mid 70s, but was treated and has had no issues since. New roof on the garage in 1997.... I think this will all be a real asset when I go to sell. I am putting everything on the table. Inspectors work to drum up things NOT on the disclosure list in order to bargain from (or buyers use their info that way).

[Alan Trout]

Being a home inspector I can tell you depending on how it was fixed one might be able to tell it was repaired and it may not be able to be discovered. Most home inspections are visual, practical and non destructive. Latent defects may not be discovered. I have seen sellers go to some pretty extraordinary efforts in attempt to hide major structural issues. However I can tell you for sure that at least in my state this kind of damage legally should be disclosed. Also when they go to get homeowners insurance the claim for the damage will show up in the records.

Failure to disclose a known issue can lead to a suit under the Deceptive Trade Practices Act. and in my state that opens it up to triple damages along with attorney's fees.

By the way the number one law suit in real estate is improper disclosure.

Good Luck

Alan

[Jeffrey Makiel]

Their slimey realtor is saying you don't have to disclose things from previous owners. I don't buy it.

I've always felt that this industry could use a good clean-up.
-Jeff:)

[Matt Meiser]

I've always felt that this industry could use a good clean-up.

Here here! There are plenty of good Realtors. But a lot of lazy/stupid/scumbags too. We ran across at least one of each last time we moved. Hopefully the downturn will weed out the first two, but I suspect the last are thriving.

[Mike Cutler]

Dan

There are a few things here, at least as imparted in your original post, that would help a new buyer.

First if the house was truly condemned, and I do believe you, then it lost it's CO (Certificate of Occupany).
Second. A repair of that nature isn't an out of pocket expense and an insurance claim had to be filed. Then there would have been a permit applied for to repair the house. The scope of that size of repair would have had the insurance company sticking their nose into it.
Third. During and after the repair there had to be inspections for structural, roofing, siding,electrical, and plumbing done.
Fourth. The home would have to regained it's CO. This isn't normally an easy thing to do,and may require that the home be brought up to current codes in areas not affected solely by the repair.
All of these facts should be on record and would show up during a search.

[Dan Karachio]

Being a home inspector I can tell you depending on how it was fixed one might be able to tell it was repaired and it may not be able to be discovered. Most home inspections are visual, practical and non destructive. Latent defects may not be discovered. I have seen sellers go to some pretty extraordinary efforts in attempt to hide major structural issues. However I can tell you for sure that at least in my state this kind of damage legally should be disclosed. Also when they go to get homeowners insurance the claim for the damage will show up in the records.

Failure to disclose a known issue can lead to a suit under the Deceptive Trade Practices Act. and in my state that opens it up to triple damages along with attorney's fees.

By the way the number one law suit in real estate is improper disclosure.

Good Luck

Alan

Alan and Mike and everyone, thanks! This is good news about the insurance company most likely finding this issue with a claim history check! Trust me it was a massive claim. Goes to show what a moron their realtor is - if he knew his stuff, he would know about this right? I guess his mother never told him how little lies can come back to bite you.

At the root of all this is concern from the rest of the block. To a person, we all would welcome a new neighbor, but what kind of neighbors would we be knowing this person may be buying a house without understanding the history? Again, the repairs might be fine, they might not. That's why it has to be disclosed, so it can be investigated! So, I feel better with this and won't be sticking my nose into this too far.

[Eric Larsen]

To me this is entirely unethical. Is it also illegal? Their slimey realtor is saying you don't have to disclose things from previous owners. I don't buy it.




Your state real estate board would be HAPPY to hear about this. Real Estate laws vary from state to state, but full disclosure is on the books in almost every state. Your neighbors are committing felony fraud. Their realtor will face stiff fines if the charges are valid.

[Mike Gager]

to me this is not a current issue

a current issue would be a sewer line that needs replaced or a leak in the basement

a portion of the house that was repaired after damage, inspected and approved is not an issue

things happen to houses all the time. ill use my example i mentioned before, if a house had its roof damaged in a storm in 1980 and the owners of that time replaced it then the house went through several owners over the next 30 years, is that really something that one would consider a current issue?

[Eric DeSilva]

Just read a long story in the NYT about houses previously used as meth labs that are sold without disclosure, and the new owners have had serious health issues. This doesn't strike me as the same kind of issue, but I'm guessing state law should clarify things.

If it isn't required, the whole "voluntary disclosure" thing by the neighbors seems a little over the top. But hey, if you collectively want to depress the value of your homes by artificially lowering the comparable resale values on your block for an issue that other real estate agents won't see when they are valuing your home, have at it.

[Dan Karachio]

Eric, you are missing the point. They are breaking the law - this has to be disclosed. As we have now said 50 times, if the repair was done well or not is not the point.

Property values in our neighborhood and block our fine. In fact, my house was rated higher because of this one - they are basically the same house and we bought ours it was comped, but theirs was rated poor and ours good.

Also, we just realized their disclosure statement fails to note yet another issue! This past year their water heater broke, flooded their basement and they had a big claim on that with all new drywall, flooring, carpeting and a basement moisture cleaning service out there at least four times. Unbelievable, but right there on the disclosure statement is "Any known water damage" with a check next to "No."

[Michael Wetzel]

I hate to be the one to say this but... you are fixated on something that is not your concern. I had a neighbor who didn't miss a dog farting at midnight during a t-storm and it was quite annoying.


Your idea of disclosure laws defeats the purpose of having them. In another 10 years you will need to list stupid stuff like "replaced broken outlet cover" or "replaced cracked toilet seat" or "2 pieces of soffit blew off in a T-storm and they were reinstalled". Disclosure laws were meant for CURRENT issues like hidden mold, unrepaired roof leaks, failing septic system, failing wells, etc. Not items that were properly taken care of and fixed according to building code.