What should we do now that we've discovered a major flaw in our new house?

July 21, 2007 6:31 PM

We are about four days from closing on our house and just did the final walk-through and came upon a real gut-punch of an issue. The next door neighbor has the framing up for his new garage -- we knew that he was building this and where it would be but we really did not know how tall it would be....

.... it is easily 25' high and, I will guess, that once he puts the roof on, it will be at the 30' max. It is 5' from our property line. We did not do due diligence and pull the permit papers as we should have weeks ago; we learned that the permit he had was for a new bedroom addition, single story and a garage. We had seen where the footings were placed for the garage so we had some sense of how close it would be.

Our prospective house is on a small lot and we have about 5' on either side from the property line. The backyard is not very substantial and the rear neighbors are about 1' off the property line but with our 6' fence and the fact that they have a 1-story house, while not ideal we accepted it. To the south we have two somewhat dense fruit trees so our real sky view is to the North -- soon to be obstructed.

The seller was there and told us how this neighbor required a variance for his structure and that he and some other neighbor's signed something agreeing to it! He also told us how this guy wanted to have his garage even closer to the property line (not allowed) and was convinced to move it. I am distraught.

Questions -- we are going down Monday to the zoning office to see if we can get these permits pulled so we can take a look at them and see what the hell he has planned and also to see what variance was issued and whether he has any other violations of code going on. We are hoping to see if an inspector will get out there and give it the eyeball.

In our disclosure from the seller, there was, of course, no mention of this building going on next door or the fact that he had given his approval for a variance to be issued. This is Oregon and there's nothing on their little check-box form that specifically asks this. The seller appeared himself to be a bit surprised at how the framing was going.

We are supposed to sign papers on Wednesday, get the keys on Thursday and start moving in on Friday. Obviously, we're first going to hunt down this permitting/zoning thing and see what that tells us. I'm just not sure what else to think. If we are able to pull out now, we'll surely lose our earnest money. Will there be an option for the seller to reduce his price? Unlikely, right? Was this something that should have been disclosed or is this one of those, "sorry, you're s-o-l, dumbass." Also, we are worried that we'll end up in this house having royally pissed off a new neighbor -- if we're willing to set the inspectors on him, should be we even more ready to just back out of the whole deal? He's lived in this neighborhood for about 15 years and it seems the seller found him to be a great source of help -- he's apparently a really handy guy who is quick to help out a neighbor.

Oh, I'm just really sick over this. This is our first house and the whole thing has been a roller coaster and we were so looking forward to moving there. I'm just really afraid that this big wall (all the bedroom windows in the house will face it) is going to be a real stinker when we go to sell in 5 years or so.

Oh, and, you know, any thoughts about how to lessen the impact of a 25' wall dominating the back yard -- go ahead and bring 'em.

posted by amanda to home & garden (20 comments total)

If you're really concerned, talk to a lawyer who specializes in real estate - not just your real estate agent, if you have one. I'm sure it varies from state to state, IANAL, etc, but my gut reaction is you have virtually no recourse on this. I would assume that the seller is under no obligation to disclose information on neighborhood property, unless it has something to do with your property (road easement).

I'd say your only hope is that the seller did sign something about the variance and didn't disclose it. Talk to a lawyer.
posted by shinynewnick at 7:09 PM on July 21, 2007

As for losing your earnest money, most likely you would if you pulled out at this point. Your agent might find a loophole, but doubtful. And for negotiating the price, it's certainly an option, but the seller is under no obligation to negotiate unless they feel you are going to back out and forfeit the earnest money.
posted by shinynewnick at 7:11 PM on July 21, 2007

My dad's a zoning officer on the other side of the country. I know a bunch of this stuff because I typed up reams of his correspondence, but of course, everything depends on the jurisdiction (I know nothing about Oregon code) and on the individuals involved. So everything's in general terms, and YMWV anyway.

Everything really depends on the P&Z guys right now. When they approved the variance, there should have been a hearing. Ask for the minutes of that, and any related information they can give you. There may be an upcoming hearing that will cover your neighbor's plans as an ongoing topic; make sure you know when that meeting is -- then document (photos, measurements) exactly what's going on, and write explanatory letters to submit in case there isn't time to let you speak at the meeting. Take a whole lot of pictures from all possible angles; Polaroids are best, but a disposable camera should also be fine.

If you call and can explain an issue, a zoning officer should come out and take a look at the property to be sure everything's exactly as it was approved. They get called for truly ridiculous stuff, and -- around here, anyway -- always wind up having to go check out the situation and document it all, just in case.

It's worth noting that while you say your neighbor told you the builder was "convinced" to move his planned garage farther from the property line, "ordered" would probably be more accurate. Zoning officers tend to be incredible sticklers about following the exact plans that were approved, so if the neighbor's building 6" closer to the property line than the approved plans show, chances are he'll have to redo it all. Pray for something like this. (Of course, if it's a small town where everyone knows each other, and the neighbor's part of the good-old-boy network, that won't work.)

Good luck. Please update us on Monday after you visit the zoning office.
posted by booksandlibretti at 7:16 PM on July 21, 2007

"if we're willing to set the inspectors on him, should be we even more ready to just back out of the whole deal?"

YES. The last thing you need is eternal warfare with someone who lives 5 feet from your property line. Neighborhoods all accommodate a little give and take to make everyone happy... and you will be seen to have used up your 'take' before you even move in. This is a bad, bad, bad situation to be in.

Other than the zoning issues you are checking into, the only question I can think of is whether this is truly a case of lack of due diligence on your part, or misrepresentation on the part of the realtors/seller. If it was a bait-and-switch, you've got some leeway. If you simply didn't do your homework, there's not a lot to protect you.

I also wonder: does the seller's signature approving this structure mean anything, if the seller intended to move before it became an issue? I.e. do you have to abide by the decision the seller made regarding your home, or do you get some input now because the seller is leaving?
posted by foobario at 8:00 PM on July 21, 2007

Find a lawyer specializing in real-estate and try to get the hell out of there. From what I can see, one of two things will happen if you decide to follow through with your plans. This guy has already proven that he is the big kid on the block by having the neighbors sign agreements to his addition. Either the neighbors just don't give a shit, or they are all buddy buddy.

1 - You sic the inspector on him and maybe they find something, maybe they don't. Either way, he is pissed. If the other people that signed the agreement are his friendlies, they hate you too.

2 - You move in and keep your mouth shut. You hate your neighbor. You don't like your house as much as you did when you first found it. And guess what. When you go to sell your house, prospective home buyers will feel the same way.

Neither of those options sounds very good to me. Maybe I am not seeing 'the civil' way to handle this that makes everybody happy. Maybe somebody has better advice. But my vote is to try to get out of this deal.
posted by B(oYo)BIES at 8:20 PM on July 21, 2007

I also vote for cutting your losses and running. There is way this situation will end favorably.
posted by drleary at 8:26 PM on July 21, 2007

There is *no* way, rather
posted by drleary at 8:27 PM on July 21, 2007

Is there anything in your contract to cover this? My previous contracts have had clauses that require the seller to disclose any legalities that would affect my property. Take another look at your contract. And get in touch with a real estate lawyer -- quick. Your agent may also spot something in the contract, but I'd want more than his/her word.
posted by acoutu at 8:35 PM on July 21, 2007

bail out or keep quiet.
You don't really want to live somewhere where your next door neighbor hates you because you made him tear down his garage, do you?

I guess it all depends on how much the earnest money was and if you can get it back or not.
posted by itheearl at 8:53 PM on July 21, 2007

have you considered just talking to the guy? "Hi we're the folks who were about to buy the place next door, but to be honest, we're a little intimidated by the impressiveness of the addition you seem to be working on. whatcha building?"

And then, if it is really too big for you to be able to enjoy your new home, you back out and consider the lost dough an educational fee.
posted by anildash at 9:17 PM on July 21, 2007

If you're considering trying to back out, you should talk to a lawyer first to guesstimate the likely consequences of backing out this late in the deal and whether this was something that is required to be disclosed.

If I were selling the house and you pulled out because you don't like the way my neighbor's garage is turning out, I would be unlikely to be satisfied with merely keeping your earnest money. I would talk to an attorney about the wisdom of suing you for nontrivial damages (compensation for all of the showings in that time that didn't happen because we were in contract, any closing costs I had already incurred, and so on), or even for specific performance.
posted by ROU_Xenophobe at 9:31 PM on July 21, 2007

Having had surprises from my own first home purchase, your first intuition is usually right. I had a lot of surprises that I was not aware of nor were disclosed, unfortunately i bought the house "as is" and learned a b-i-g lesson because I had an initial reaction also. As mentioned by others hopefully you can afford to lose the earnest money, because unless it's your retirement home, it will be a burden and difficult to sell. Good Luck, and please update us again...
posted by asia at 9:49 PM on July 21, 2007

The earnest money is not so much that it would preclude us from walking away if it feels like we must.

A lot of good gut reactions in here which is something I needed.

Hadn't considered the angle that the seller might go after us for not closing on the deal. That's an entertaining notion.

I will update after Monday and see if I can find a lawyer recommendation.
posted by amanda at 9:56 PM on July 21, 2007

It is unreasonable that you would pull out because of a neighbors development had that development been in line with local codes / restrictions etc. He has a right to build whatever he wants within the codes on his property.

However, if the seller says that he signed something allowing the neighbor to build a behemoth that would otherwise NOT be allowed and the seller did not disclose this information to you I dont see how he could come after you if you decided to pull out. If he valued his property maybe he should have asked some more questions of his neighbors?

You do however seem to have 10 feet between your house and his addition, this is pretty typical on small lots, at least in Los angeles. 5' on your side is enough to plant some big ass bamboo to hide his house (potentially) and still have enough room to walk past. In some places the sideyards are only 3' wide and the houses can be 30' tall!
posted by outsider at 11:04 PM on July 21, 2007

If the next-door addition is going to demonstrably and materially reduce the value of your proposed new property and that wasn't addressed during negotiations and your seller knew about it and was legally obligated but failed to provide this relevant information, you might have a leg to stand on.

The first thing anyone involved will want clarified will be the dollar-impact question: is it really going to reduce your properties value? By how much?

Your argument is not with the guy next door in any case, whether he's part of an old boys network or not, it sounds like he's gone through the legal hoops on this and it's a done deal. If any useful argument exists, it's with your seller.

Of course: not a lawyer, don't know about local specifics, etc.
posted by scheptech at 12:43 AM on July 22, 2007

We don't have "earnest money" here so I wanted to know more about it. Googling around suggests that its strange name is because it is specifically not a deposit paid as part of a contract. There is no legal contract yet, nor even legally an automatic loss of all the earnest money if you pull out. You need local advice.
posted by Idcoytco at 4:14 AM on July 22, 2007

Earnest money, as I understand it, is actually sort of like a deposit -- it is part of the sale price and is not required. It basically says that I am so interested in the property that I'm willing to pay you for part of it right now. And then if we go through all this good faith stuff and signing things and I decide to pull out, you get the money. We put down 2k.
posted by amanda at 7:04 AM on July 22, 2007

In a case involving a friend his addition of a bedroom (adding X amount of living space triggered a zoning change that required him to lop 2 feet off of his garage because it was (post addition) too close to the property line. The Variance your neighbor recieved may have been approved under false pretenses, and the actual building may be larger or different enough to void the variance.
posted by Gungho at 11:07 AM on July 22, 2007

One tactic you *could* take, or at least talk to a lawyer about, is to alert your mortgage bank to the neighbor's changes and be clear that you're willing to pay for a new appraisal, and then hope that it won't appraise for the mortgage amount so you're unable to get a loan.
posted by ROU_Xenophobe at 12:43 PM on July 22, 2007

Update?
posted by agregoli at 7:12 PM on September 1, 2007