What to do when your house shrinks without you knowing it?
May 16, 2012 8:23 AM   Subscribe

Our house is 300 square feet smaller than we thought it was. Is there anything we can do?

We purchased our house seven years ago in North Carolina thinking that the square footage was around 300 sqft more than it is (1900 sqft vs. 1600 sqft). In the process of selling our house, an assessor discovered the discrepancy and the correct size has now been verified multiple times. From the MLS data, it looks like the previous owners of the house also purchased the property with the incorrect square footage. However, the purchaser before them had the correct square footage listed on their MLS data sheet.

Is there anything we can do to today (possibly before we sell the house) to recover some of the money we will lose because of this mistake? Because of the lost square footage and the lousy economy, we are going to have to sell our house for at least a $10,000 loss.
posted by JuliaKM to Law & Government (13 answers total) 1 user marked this as a favorite
Do you have title insurance, and does that cover this?
posted by tilde at 8:30 AM on May 16, 2012

Best answer: See a lawyer. I assume what you're hoping to do is to convince the previous owner's realtor to make a financial settlement with you based on their having misrepresented the square footage of the house. Whether or not this is possible depends on a lot of things, including what North Carolina law is on this topic, whether it will or will not be necessary to prove that it was an intentional misrepresentation, whether (if it is necessary) you can prove it was an intentional misrepresentation, and whether you can prove that the loss you're going to take on the house is greater than the losses other people are currently taking on comparable houses whose square footage was correctly represented.

Best of luck with whatever you decide, and I'm sorry you're in this difficult situation.
posted by Sidhedevil at 8:30 AM on May 16, 2012

Best answer: IANYL, TISNLA.

I would talk to your lawyer and review your title insurance policy. That said, I would prepare myself for the possibility that there's not much you can do about this. A lot of these sort of issues (actual square footage, telephone easements, etc.) are non-actionable if you actually went onto the property and (theoretically, at least) had an opportunity to check for yourself. Again, that would depend on your jurisdiction.

But talk to your lawyer, at least.
posted by Capt. Renault at 8:41 AM on May 16, 2012 [2 favorites]

Best answer: Now you have proof of the size of the home, I would suggest you ask for a tax re-assessment and see if there's a way you can reclaim any overpaid taxes as a result of the home being assessed as larger than it is.

Assuming that the 1900 sq ft. is what the city thinks it is too.

That may get you a little money back and help out.

Chances are the house itself shouldn't sell for much less except to a buyer that buys it blind. I'd like to think most buyers base their decision on what they see in the house, not what they see in paper.
posted by shepd at 9:13 AM on May 16, 2012 [3 favorites]

Best answer: Title insurance is not for this. This is what home inspections are for, among other things. If you had a home inspection done, and the inspection report lists the square footage, you might have a claim against the inspector. Or the realtor who listed it. Working against you is the possible statute of limitations expiration and the fact that real estate purchase and sale agreements are typically pretty airtight about recourse after the closing, ie., you don't have any, and limitations of liability. But IANAL either, and you need advice from an actual lawyer about this.
posted by beagle at 9:18 AM on May 16, 2012

Response by poster: Thanks for all of the great advice so far. I'm waiting to hear back from a lawyer.

The statute of limitations for contracts in NC is 3 years, so we are probably out of luck.
posted by JuliaKM at 9:25 AM on May 16, 2012

Response by poster: And, if anyone has a recommendation for a lawyer in NC that would handle this type of case, I'm all ears.
posted by JuliaKM at 9:27 AM on May 16, 2012

I had always thought that square footage was mostly an estimate - is there a specific legal definition? For example a refinished basement can be counted in some cases but not in others. I've also seen garages counted.

In our case the room dimensions for MLS came from measurements made by a real estate agent with a sonic tape...so I'm sure our values aren't correct to within a square foot...300 is a big difference, but could this be from a variation on what counts in the computation?
posted by NoDef at 10:06 AM on May 16, 2012

It may also be worth inquiring if your title insurance covers something like this, assuming you got title insurance. Don't automatically give up on statute of limitations grounds, the "discovery rule" could be of some help if your jurisdiction follows it. Ask your lawyer about it.
posted by craven_morhead at 10:10 AM on May 16, 2012

Best answer: I'm a licensed real estate agent, but not licensed to practice in NC. So, I'm writing as a real estate salesperson in general:

It's likely that any marketing material connected to this property said something to the effect of "information deemed reliable, but not guaranteed." But, regardless of that, as a buyer, you had opportunity to obtain any number of inspections and surveys prior to the closing. Because of this, it is not likely that you will have any recourse with the seller or anyone involved in marketing the property.

You may want to file for a re-assessment with your county and/or city but do not be surprised if the tax value of your home does not go down by much and you therefore are not able to gain much back.

This type of thing happens, and most often, it's due to clerical errors.

If you believe someone set out to defraud you, though, that's a different matter, and I would highly recommend that you consult an attorney.
posted by FergieBelle at 10:32 AM on May 16, 2012

You're almost certainly hosed, but you could try to file a nuisance suit and hope to be paid off.
posted by aramaic at 10:42 AM on May 16, 2012

Have you thought about the possibility that the two figures disagree because one is an external measurement and one an internal one? It shouldn't make a huge difference but it does make some difference.
posted by TheRaven at 12:02 PM on May 16, 2012

I had always thought that square footage was mostly an estimate - is there a specific legal definition? For example a refinished basement can be counted in some cases but not in others. I've also seen garages counted.

There's not a legal definition. The standard practice in real estate is to measure the livable area within the outside perimeter. So the thickness of the outside walls (and inside walls) counts in the square footage. Livable area excludes things like attic space, utility closets where there's a boiler or water heater and the headroom above stairways. Also traditionally excluded are basements, finished or not, and garages. Finished basements with grade-level walk-out exits are kind of a gray area. Because of the practice of finishing basements listings often say "above-grade livable SF" to clarify what the number means. More.
posted by beagle at 8:59 AM on May 17, 2012

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