We were sold a Money Pit.
September 14, 2007 5:03 PM   Subscribe

We got absolutely screwed by the guy who sold us our house. Can you suggest some recourse?

We bought a house during the first week of August. It's a turn-of-the-century home (1911) and it's pretty. It's got some great features, like wavy windows, some enormous rooms, grand ceilings, and other old house features. The renovator put in a bunch of new stuff, mostly fixtures and lighting, but it looks nice.

As awesome as this sounds, we got screwed by the seller, and now it's time to get some recourse. We've been lied to, sold something that wasn't even nearly true, and we've run the gamut of things we can think to do. Let me fill you in on the story:

We bought this house from a guy who has a business of flipping houses and charging stupid ridiculous amounts for them. Cosmetically, his guys do pretty work - he apparently doesn't do any of it himself, and he hires crews of people who may or may not be licensed, though we were told they were. We didn't pay an exorbitant amount of money - but it was at the top of our range - and we paid this amount of money to buy a home that we thought was finished. The contract we signed was a "as is" contract, as I assume all houses are, and we are finding that not only did his guys do substandard work, but they royally screwed some things up as well. Some of the work that this guy's company did was pretty dangerous, pretty careless, and we didn't find out about it until after we'd been in the house for a few weeks.

You might ask yourself: "didn't your home inspector see this when he/she was inspecting?!" Well, much to our dismay, yes, the inspector did see it, and no, the inspector didn't tell us. I even asked the inspector, when I was having the house inspected (which the seller was present for, no less, along with myself and our real-estate agent), if he would feel comfortable me living in this house. He said, plainly, and to my face, "yes, I feel comfortable you buying this house." My wife called this inspector (who works for a small home inspection company) and asked him what the score was, as his report was inaccurate. He then proceeded to tell my wife that A) he thought the guy seemed shady just by meeting him, B) we shouldn't have bought this house, and C) he couldn't cause the seller to have to do a bunch of renovations due to a bad inspection, nor could he make the agent lose a sale. This all sounds pretty shady, especially since she was OUR agent, and we were gonna buy through her regardless. We basically paid this guy $300 for half a page of inspection report and some lies. We sold a home in Texas, and the inspection report was around 14 pages. This one was barely half a page.

This all came down when the remnants of a hurricane brought rain and wind through Oklahoma and drenched the state with over 6" of rain. Our roof essentially let several gallons of water – the entire width of our house at the addition – ruin the ceiling, walls, and other surfaces in our house. It was bad. We had a remediation expert come and give us an estimate, and it alone was over $5500 to remediate all of the wet plaster, ceiling, wall, and drywall surfaces that are damaged. This was two weeks ago – it's still raining from time to time, and the thing still leaks. We cannot unpack our stuff (we're essentially living out of the kitchen and upstairs bedroom with the majority of our stuff still filling two massive rooms on the first floor) and we can't use our furniture because when it rains, it leaks. The floor was damaged, and we've been dealing with this for a month.

The really crappy thing was that none of this damage was disclosed to us at ALL. When we looked at the house for the first time, there was a damaged part of the ceiling in the first floor addition, which, as a part of our contract was supposed to be fixed and solved as a condition of us buying the house. This obviously didn't happen. There's other cheap and dangerously-done stuff as well – for a small example, the lugs that tie our power to the city power are electrical taped instead of booted. If one of us were to grab onto one of those lugs, we'd die. This poor work and cosmetic fix stuff is present in all areas of the house.

The real bitch of this situation was that we were sold a "new" roof. The roof that this guy and his laborers put on was composition shingles over old wood shake. On one shallow part of the house, the addition, this guy put shingles on a roof with a pitch under 2 and 12 – we've since learned that no manufacturer recommends putting shingles on a surface that shallow, and the roofers have said things like "I can't believe this guy put shingles on here – only a matter of time before they either blow off or leak like a sieve." It is terrible, we were told that it was "New" and had no known problems, and roofers have estimated a new roof on all of the house between $6500 and ten grand.

We did call our home insurance agent, and we were told by the adjustor that the event that happened was a "wind event" and that the rain leakage was not directly related to wind damage. We'd only be able to get maybe a thousand bucks worth of damage fixed, which is essentially our deductible. So, we exhausted that route. We also called and met with one lawyer who told us that yes, we had a decent case, but it might take two years and $20 to 30 grand (of which we'd get most, but not all back) to get any progress. This is if he rushed.

What we want is to get this fixed. We want to get a new roof, get some of the other dangerous and damaging stuff fixed, and be done with this. How would you go about this?

We have a few ideas in mind – writing the seller a letter and giving him a week to respond, then calling the DA in our city and letting him know that someone is doing work as a company and selling it like a consumer and doing a really poor and dangerous job of such. We're also considering calling the city's permit offices and giving them a list of all of the properties this guy's company is selling (he pulled no permits on our major renovation, and he pulls no permits on any of his work). We're considering calling the local consumer advocate department of the local TV station and letting them know of this as well as protection to other buyers from this guy. My wife and I differ on some of the other post-non-communication-from-the-seller tactics, like calling INS and the city on him for hiring illegal labor (which I cannot prove, but the laborers we met do not speak English).

Can you suggest a course of action? Our ideal at this point would be to get out of this house completely, but we're pretty sure that we're not gonna get that. So we'll settle for getting the stuff that this guy's company did really poorly in the flip of this house.

Please post here, or we can take email at livinginamoneypit@gmail.com
posted by anonymous to Home & Garden (31 answers total) 8 users marked this as a favorite
I'm sorry, you bought the house as it, if the inspector did not catch stuff and you used a licensed and bonded inspector you have resource via the inspectors quality, but you shouldn't have bought the house and waived the inspection contingency unless you were satisfied with the report, this is why there are contingencies and escrows.

You should also be talking to the buyers agent you used who should have provided you with information on what to expect throughout the process.

You can try and make this as politically ugly for the flipper as possible and to get some compensation from them. You can consult an attorney who specializes in real estate law and they may be able to offer you some alternatives.

If the disclosures were fraudulent or incorrect the attorney can help you follow that through the legal channels, but it may be possible, if you approach this correctly, to just get the seller to meet you half way. Lawyer is the best bet for options.

Best of luck!
posted by iamabot at 5:24 PM on September 14, 2007

Don't forget your local newspapers.

Also, if you really think the guy's paying illegals in cash under the table, forget the INS - the IRS is where it's at. Illegals don't get payroll taxes deducted and the IRS frowns upon that.

For what it's worth, I don't think your goals are achievable. I think your best bet is to pay the attorney to go after your inspector as well as the seller; and I think that whether you do this or not, you're letting yourself in for a lot of wasted money, effort and time, and a lot of extra heartache. At best you will make yourself notorious in the community you live in, and not in a good way. The time to make these things right is before you sign; now you've got an uphill slog to convince a court differently.

Thanks for posting your story, though - I learned from it.
posted by ikkyu2 at 5:27 PM on September 14, 2007

"Well, much to our dismay, yes, the inspector did see it, and no, the inspector didn't tell us."

It seems like your beef is with the inspector.
posted by mr_roboto at 5:37 PM on September 14, 2007

Yeah, if you have any evidence of what the inspector told you vs. what was the true state of affairs, you could surely cost him his inspector's license.
posted by LobsterMitten at 5:46 PM on September 14, 2007

I agree with the above; go after the inspector.
posted by Justinian at 5:54 PM on September 14, 2007

Caveat Emptor applies to home purchases, but IIRC there may be some exceptions where express warranties of conditions were made. That is, picture the same crappy house, but in Sale A the buyer promises nothing, and in Sale B the buyer makes a precise representation about the quality of a specific item. Again, IIRC, in Sale B the buyer has some recourse. In addition, IIRC, there are some areas in which implied warranties come into play. I cannot recall whether either express or implied warranties allow buyer to rescind the sale, I would more likely expect a suit for damages to be the legal remedy - but that's just instinct.

Disclaimer: This is the area of every day law about which I know almost absolutely nothing - my recollections represent my vague understanding of the course material in law school.

If I knew what state you were in, I would proffer local real property law information, and/or at least do some basic research to confirm whether there is any validity to my suggestions.

Wow, I watch those house flipping shows on TV sometimes for the maximum 2 seconds of attention I can focus on such inane programming, and I always wonder (no offense here) who they sucker into buying cheap, shoddy, looks-nice-for-a-week, bargain basement refurbs. I know I would be tempted by a nicely updated older home, too, and I'm not being bitter towards you.
posted by bunnycup at 6:14 PM on September 14, 2007

"as is" is not a defense for the seller in california if he didn't disclose it on the disclosure statement. caveat emptor does not apply in this context. i can't speak to other states, call a real estate lawyer monday morning.
posted by bruce at 6:26 PM on September 14, 2007 [3 favorites]

I would check into the real estate disclosure laws for Oklahoma

specifically: §60-833. Disclaimer and disclosure statements.

If all of these problems were not listed on the disclosure statement you got from the seller, go after him, but don't let the inspector off the hook.

IAMNAL so go and find one.
posted by kanemano at 6:54 PM on September 14, 2007 [1 favorite]

The state seems to be Oklahoma.

The inspector screwed you!
posted by rhizome at 6:55 PM on September 14, 2007

Forget going after the inspector. He probably had you sing something that says he is only liable up to the cost of the inspection. Go after the realtor. Both the seller and yours. They may have made certain statements that they knew to be false. Especially if they sold others of this mans properties.
posted by Gungho at 6:59 PM on September 14, 2007 [1 favorite]

Most states have done away with caveat emptor and have protections for buyers against fraudulent transactions (real estate included) like this one.

That said, I'd agree with the above sentiment, your action is against the inspector and maybe your own real estate agent. You could probably sue the seller too, but it sounds like you've already waived a lot of the protections you could've pointed to. And I'm sure you know this, but it's going to be a long hard fight without any guarantee of any result other than losing more money.

I'd call in this order:
- real estate lawyer (and follow his advice before doing anything else suggested in this thread or anywhere else)
- city/state lisenceing offices (for the inspector and the seller, any and all lisences that they may require to do their jobs)
- Newspaper / Consumer advocate groups

IANAL, blahblahblah, good luck with a shitty situation!
posted by T.D. Strange at 7:05 PM on September 14, 2007 [1 favorite]

first call is to your state's attorney general office or state ombudsman (if you have one) to find out what the home sale disclosure rules are. In some states, if the seller, the agent, or the inspector have knowledge of the sorts of defects you detail, they have a duty to disclose. Or Bruce's suggestion to call a r.e. attorney is good, too. They'll tell you whether you have a chance in hell for no cost, usually, and they'll tell you haow much they'll charge to make you whole if there is a chance. Just make sure that the attorney is not related to your home inspector.

The one with probably the least duty is the agent--unless this was a buyer's agent, in which case she works for you. If she is a real estate agent functioning as the seller's agent, it is nice that you were going to buy from her any way, but her duty is to the seller not the buyer.

You also may have some recourse to going after the seller if they materially misrepresented something (told you it was a new roof and you can confirm that it is not--just because it leaks buckets doesn't mean it's NOT new, jut poorly done).

I speak as someone who bought a house from a Baptist preacher who lied about just about everything in the house, but moved several states away after the sale was closed. We eventually sucked it up and fixed what we had to and a little more that we could afford. We didn't go after the seller because we would have had to hire an attorney here and one in the other state and the chances of recovering anything (according to the attorney we consulted here).

Since that time 30 years ago, the laws in this state changed to give more protection to the buyer, including a pre-sale inspection with some teeth to it and consequences for acting like your inspector did.

However, just from the little I know of my state politics and those in OK, I'm guessinng that you're SOL.
posted by beelzbubba at 7:10 PM on September 14, 2007

Attorney, get one.

Home inspector, sue them, along with everyone else. Their insurance may be your deep pocket. Proving the seller lied is tough, but depending on your locale certainly doable. Did you have an attorney when you bought the house? If you didn't then you screwed yourself. If you did, then sue him too. People who buy houses without using a lawyer are fools. I hope you were not one.
posted by caddis at 7:16 PM on September 14, 2007

I've confirmed by email that the state is Oklahoma.
posted by winston at 7:29 PM on September 14, 2007

A lot of states don't have any licensing for home inspectors. But even in that situation, if your inspector had any certifications, perhaps you could complain to the organizations that granted them. He might lose some certifications and find it modestly more difficult to get work.

Good home inspectors offer a guarantee and carry errors and omissions insurance so they will have the money to pay you if they make a mistake. This is a good thing to keep in mind for the future.

Did your real estate agent recommend this inspector? A lot of agents do have particular inspectors they recommend because they know they're not going to ruin the sale. No kickback required -- just saving the commission is reason enough. If your agent recommended the inspector, and you do decide to sue, you might consider including the agent in the suit if you think there is any possibility that she was involved in this deceit. (I am not a lawyer.)
posted by kindall at 7:30 PM on September 14, 2007

Get a phone call recording device and call the inspector back. (I assume you are in a state where this is legal.) Play a bit dumb about what he told your wife. See if you can get him to say anything like that again. Try to be calm and just make it sound like you want to make sure you understood what your wife said or something. Tell him you're just trying to get a sense of all the repairs you have to do. Ask him if there was anything else you should be looking at getting repaired. Try to make it a friendly chat.

Then lawyer up.
posted by acoutu at 8:58 PM on September 14, 2007

Meanwhile, you may end up investing more time and money seeking justice from one or more individuals, companies, and / or government bodies than in just fixing your house. Ugly, but there it is. Perhaps ask the oft-suggested lawyer for odds on this possible outcome first.
posted by scheptech at 9:23 PM on September 14, 2007

I know nothing of real estate, but it seems strange that you accepted the inspector's half-page report when you knew your previous one to be 14 pages -- weren't you alerted by that, and how come you let the sale go through?
posted by loiseau at 10:23 PM on September 14, 2007

I know nothing of real estate, but it seems strange that you accepted the inspector's half-page report when you knew your previous one to be 14 pages -- weren't you alerted by that, and how come you let the sale go through?

Not to speak for 'em, but I find many people (including myself on occasion) take people at their word when dealing with unfamiliar situations, if the alternative is to push back on something where potentially you might be completely wrong (and so feel like a jackass.)

It's unfortunate, because lots of people specialize in screwing people like this. I personally am finding (moreso each year) that it's better to do a lot of research in advance, question everything, and not worry about people thinking you're a jackass. Most recently (as in last week and a half) it got me almost one thousand dollars' worth of new kitchen cabinets (in the correct size, this time) and the pulling/reinstalling of an entire walls' worth, because I pushed back hard on the contractor (who mismeasured.) Several years ago, I would have likely sucked it up as my fault (as they tried to claim) but I've learned my lessons well.
posted by davejay at 10:47 PM on September 14, 2007 [2 favorites]

You need an attorney to sort out these matters. Take a picture of everything and bring it to the attorney.
posted by Ironmouth at 11:06 PM on September 14, 2007

One hint of good news:
Oklahoma home inspectors are requiered to have $50K+ of
General Liability Insurance coverage.

I like the 'call him up and record the conversation tactic', "My roof leaked! Why did you recommend I buy that house?" and it would apparently be legal:
but I wouldn't do anything without the advice of a real estate lawyer. I would suggest you shop very carefully for a good one. If you don't know any, go with a recommendation by a trusted lawyer who works in another field.
posted by sebastienbailard at 12:00 AM on September 15, 2007 [1 favorite]

Sounds like the home inspector was at fault, and you'd have an easier time showing that. The seller can say that he didn't know what the condition of the house was. If he didn't know, then he couldn't have disclosed, so therefore, it's up to you to prove that he knowingly failed to disclose. That will be difficult. All he'd have to say was that it was the contractor he hired who did a faulty job, and had no idea that things weren't done as well as he thought they were. It also sounds like the seller never lived in the house. In that situation, the seller can also claim that he just simply didn't know the condition, and therefore couldn't have disclosed. And since he sold the house as is, that provides the seller with quite a bit of protection.
On the other hand, you do have a reasonable expectation that the home inspector have knowledge of the condition of the house, because he is licensed to inspect the house.
posted by jujube at 12:43 AM on September 15, 2007

Just because the laborers you met do not speak English does not mean they are undocumented. There are plenty of people working in the US on work visas and green cards whose English isn't great. Not speaking English is not against the law. It seems of all of the people involved in the situation, they are the least to blame and your attempt at taking revenge on them will do nothing to prevent future buyers from having these problems with the seller, the agent, or the inspector.
posted by hydropsyche at 6:45 AM on September 15, 2007 [3 favorites]

I went through a similar situation, although my seller worked much harder to hide the defect that eventually became a dispute. My advice: hire an experienced real estate attorney that has taken issues of seller disclosures and inspector omissions to court. Second, don't listen to anyone who says that this is your fault. All houses are bought as is. However, in my state (and as I understand it, probably all states), the seller has an obligation to disclose anything wrong with the house. If they don't, they are liable. The inspector has an obligation to tell you everything they find -- that is their job.

A few other thoughts, based on my experience. You will probably go after both the inspector and the seller. Inspectors are often required by the state to carry "Errors and Omissions" insurance in case they mess up and miss something big. After you get an attorney, you will probably want to get another home inspector. The attorney can recommend someone good. I've also found Angie's List to be a good source, if they have that in your area. Odds are, if buckets of water came into your home on the first rain, buckets of water came into the home on the previous ones as well. A good home inspector will be able to see evidence of that past damage. Since the previous damage did not just clean itself up, it's pretty clear that if prior damage existed, the seller knew about it.

Personally, while you will find this period very, very stressful, I think you will absolutely collect on the funds needed to fix and remedy this situation -- provided you stay tough, realize that you were screwed, and that you have every right to live in the quality home they promised you.
posted by centerweight at 7:35 AM on September 15, 2007 [1 favorite]

As the attorney you spoke to said, you may have a very good case against a number of people. You can't anything about this situation without a good attorney--or at least a competent one who does this sort of work all the time. This is at the periphery of my firm's practice & I don't know anything about your jurisdiction, but yes, these are the sorts of things you can recover for in litigation. We have several specific consumer fraud laws in Illinois that cover these situations and plaintiffs are very often successful.

But, yes, litigation is expensive and lengthy and even when you win, it costs you more money than you expected. The stress is amazing and the process frustrating, confusing and occasionally seems extremely unfair. It takes a long time and in the interim, you often have to make your own repairs and document every thing.

My guess is that litigation is your only option. Shaming the flipper through the media isn't going to work. Having his laborers deported won't fix your roof. If the State prosecutes him, you won't get anything practical out of it. The inspector didn't care before he cleared the house; he's not going to change his mind now because you caught him lying. I would be surprised if the seller voluntary worked out a rescission of the sale with you.

I am sorry to hear this has happened to you. Were I in the same situation with my new house, I would calculate the costs of selling and moving on; the costs of riding out several years of litigation in hopes of compensation; the costs of just making the repairs myself and then see which situation my marriage and life could best survive. That's the decision I would make.
posted by crush-onastick at 8:30 AM on September 15, 2007

i second acoutu, absolutely perfect. from the info it seems you have been purely swindled, which means u have to be very legal to get any recourse. main thing is to find an exceptional lawyer
posted by edtut at 5:14 PM on September 15, 2007

If you need a second inspector to measure against the word of the first inspector, discuss this from someone with Tomacor if you can. They have made a name for themselves as very tough, very thorough, and very detailed. Real estate agents are said to dislike them because they can delay deals. We used them for our inspection and received a detailed three-ring binder after the inspection. (I do not represent Tomacor, only a satisfied customer here.) They have headquarters in Illinois, but train inspectors from all over.
posted by jeanmari at 5:48 PM on September 15, 2007 [1 favorite]

In addition to the great suggestions above (get a lawyer, get a lawyer, etc.), file a strongly worded complaint against your inspector with the Better Business Bureau, if your town has one. It's not a satisfying (to you) move, but complaints to the BBB stay on record for a while, and are very public. And if your agent was/is a "Realtor," complain to local, state, U.S. Realtor associations. Again, this won't bring you monetary gain, but it might let them know you wouldn't trust or ever recommend this agent, and maybe they (the associations) should reprimand her.

Have you told friends and co-workers who screwed you around? Did they have similar experiences with your antagonists or know someone who did? Maybe their testimony could help bolster your case. (Admittedly, I'm reaching here, because other posters covered key bases.)
posted by Smalltown Girl at 6:21 PM on September 15, 2007

Licensing and E&O insurance are no indication of the quality of a home inspector, or anyone else! You got a half-page report? How long did the inspection take, ten minutes? That's so bogus I can't even find words for how bogus it is.

Your mistake was picking a bad inspector, whose qualifications sound like they came from a crackerjack box. There are some "diploma mill" inspection associations out there, and this is what they result in. No training, no standards of practice, no continuing education, no peer review, no brains. Unfortunately, such "have piece of paper, will travel" thinking is what gets many state licensing laws written, so just being licensed doesn't mean anything, either.

As for recovering some cost: Your weapon here is the "seller's disclosure statement", in which the seller has to list any deficiencies of which they're aware. If the seller had work done, they probably had someone tell them what work needed doing. If you sue the seller, the discovery process might uncover that inspection report, whereupon you'd be able to prove that the seller's disclosure was incomplete.

I don't know how much of that you can waive, though. People who "flip" houses must be screwing somebody -- there's no such thing as free money -- so they're probably well-defended against such attacks. IANAL but you definitely need one!
posted by Myself at 1:51 AM on September 16, 2007

Sounds like both the seller and inspector may have liability here. I'd shop around for attorneys... just because one attorney told you you'd spend $20-30K suing these people doesn't mean you can' find an attorney willing to do it cheaper. If you're lucky, you might even find someone willing to take it on contingency.
posted by mahamandarava at 9:50 AM on September 16, 2007

I'd shop around for attorneys

Yes, yes, yes. Don't just take what the first attorney said as gospel. And as centerweight says, make sure you hire "an experienced real estate attorney that has taken issues of seller disclosures and inspector omissions to court."
posted by mediareport at 8:22 AM on September 17, 2007

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