Advice on Previous Fire Discovered in Inspection during Purchase of a Property

Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes

I am under contract on a property. The sellers did not disclose that there was a previous fire in the home. However, during the inspection of the home, the inspector found evidence that there had been a fire. Everything appears to have been repaired but now need to find permits, etc. to make sure it was done properly. Any advice? We would need to walk away from ~$10K so I'm trying to see if there's a path forward.

0 Reply

138 views

Most Popular Reply

Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

1) ask your realtor if the seller was required to disclose a previous fire and they "forgot". If so, you have nothing at risk and you can request your EMD back and just walk away.

2) ask your realtor what the common discount is in your area for fire damaged homes if any. Ask for that amount of a discount for forgetting to disclose the fire.

3) you should be able to walk anyway as your inspection contingency came back unsatisfactorily.

4) is there really any structural damage or did they just leave behind charred by functioning lumber?

I’d be disappointed they didn’t disclose it (if they knew and it didn’t happen 30 years ago and 2 owners ago.). But if you can’t smell it and it’s not structural. It’s basically an escape clause for you if you want to bail but not a real issue.

2 Reply

See this reply in the discussion

21 Replies

Jump to latestLatest

Sort by

Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
2y
1) ask your realtor if the seller was required to disclose a previous fire and they "forgot". If so, you have nothing at risk and you can request your EMD back and just walk away.
2) ask your realtor what the common discount is in your area for fire damaged homes if any. Ask for that amount of a discount for forgetting to disclose the fire.
3) you should be able to walk anyway as your inspection contingency came back unsatisfactorily.
4) is there really any structural damage or did they just leave behind charred by functioning lumber?
I’d be disappointed they didn’t disclose it (if they knew and it didn’t happen 30 years ago and 2 owners ago.). But if you can’t smell it and it’s not structural. It’s basically an escape clause for you if you want to bail but not a real issue.
2 Reply
Andres Ruiz
OP
Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes
2y
Quote from @Bill B.:

1) ask your realtor if the seller was required to disclose a previous fire and they "forgot". If so, you have nothing at risk and you can request your EMD back and just walk away.
2) ask your realtor what the common discount is in your area for fire damaged homes if any. Ask for that amount of a discount for forgetting to disclose the fire.
3) you should be able to walk anyway as your inspection contingency came back unsatisfactorily.
4) is there really any structural damage or did they just leave behind charred by functioning lumber?
I’d be disappointed they didn’t disclose it (if they knew and it didn’t happen 30 years ago and 2 owners ago.). But if you can’t smell it and it’s not structural. It’s basically an escape clause for you if you want to bail but not a real issue.

Thank you, Bill. We went through permits and it looks like this happened in 2002. I find it hard to believe they forgot but unfortunately I paid a $10K due diligence fee in North Carolina so will need to see what legal recourse I have. Will also need to do additional inspections, etc.
1 Reply
Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
2y
Have they owned it since 2002? Are they required to disclose? I have no ideal how NC works or their due diligence fee works. But I assume you could sue to get it back if it’s required to be disclosed. I also assume there’s a written penalty on the books for failure to disclose these are all things I hope you r realtor can answer instantly and 100% confidently.
Have they owned since 2002?
Are they required to disclose?
If yes and yes money back or discount or sue and confirm they face penalties for failure to disclose and that they “remember” to disclose to next buyer.
If at least 1 is no, then you pry don’t have a leg to stand on, just another failure of the due diligence fee structure. You could hire a fire restoration company to give you an estimate of how bad it wa and how bad it is. LMK what happens. Good luck.
0 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Have they owned it prior to 2002?
Why does it bother you that the house had a fire 22 years ago?
[email protected]301-893-4635 Podcast Guest on Show #192
District Invest Group545 Reviews
Website View Page
1 Reply
Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
2y
@Andres Ruiz I bought a building that had at one point had some fire damage. The inspector discovered it while in a crawl space under the eaves. He determined the roof support beams hadn’t really sustained any structural damage. There was no change in the purchase price due to this issue.
0 Reply
Andres Ruiz
OP
Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes
2y
Quote from @Russell Brazil:

Have they owned it prior to 2002?
Why does it bother you that the house had a fire 22 years ago?

Hi Russel. it bothers me because they didn't disclose it and when asked about it they maintained they didn't know there was a fire and there have been a couple of other items they didn't "remember" that were in the disclosures. Also, there's no evidence that the issue was properly permitted/remediated so I will have to do more work to get comfortable. Apparently the house was stuck by lighting that caused the fire. Do you think I'm overreacting? I guess integrity matters to me.
0 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Quote from @Andres Ruiz:

Quote from @Russell Brazil:

Have they owned it prior to 2002?
Why does it bother you that the house had a fire 22 years ago?

Hi Russel. it bothers me because they didn't disclose it and when asked about it they maintained they didn't know there was a fire and there have been a couple of other items they didn't "remember" that were in the disclosures. Also, there's no evidence that the issue was properly permitted/remediated so I will have to do more work to get comfortable. Apparently the house was stuck by lighting that caused the fire. Do you think I'm overreacting? I guess integrity matters to me.
Yes I do think you're overreacting.
[email protected]301-893-4635 Podcast Guest on Show #192
District Invest Group545 Reviews
Website View Page
0 Reply
Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
@Andres Ruiz
So there was a fire 20+ years ago and the property was repaired - what’s your concern???
If it was large enough they would not have gotten a new certificate of occupancy, live in the property or been able to refinance or get another insurance policy
I don’t see this as being an issue / big deal.
7e investments53 Reviews
Website View Page
1 Reply
Andres Ruiz
OP
Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes
2y
Quote from @Chris Seveney:

@Andres Ruiz
So there was a fire 20+ years ago and the property was repaired - what’s your concern???
If it was large enough they would not have gotten a new certificate of occupancy, live in the property or been able to refinance or get another insurance policy
I don’t see this as being an issue / big deal.

Thanks, it's the first time I've had this come up so appreciate thoughts on this.
0 Reply
Andres Ruiz
OP
Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes
2y
Quote from @Russell Brazil:

Quote from @Andres Ruiz:

Quote from @Russell Brazil:

Have they owned it prior to 2002?
Why does it bother you that the house had a fire 22 years ago?

Hi Russel. it bothers me because they didn't disclose it and when asked about it they maintained they didn't know there was a fire and there have been a couple of other items they didn't "remember" that were in the disclosures. Also, there's no evidence that the issue was properly permitted/remediated so I will have to do more work to get comfortable. Apparently the house was stuck by lighting that caused the fire. Do you think I'm overreacting? I guess integrity matters to me.
Yes I do think you're overreacting.

Thanks, appreciate the input. How would you handle it if this was your deal?
0 Reply
Andres Ruiz
OP
Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes
2y
Quote from @Andres Ruiz:

Quote from @Chris Seveney:

@Andres Ruiz
So there was a fire 20+ years ago and the property was repaired - what’s your concern???
If it was large enough they would not have gotten a new certificate of occupancy, live in the property or been able to refinance or get another insurance policy
I don’t see this as being an issue / big deal.

Thanks, it's the first time I've had this come up so appreciate thoughts on this.

How would you handle it, if this was your deal?
0 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Quote from @Andres Ruiz:

Quote from @Russell Brazil:

Quote from @Andres Ruiz:

Quote from @Russell Brazil:

Have they owned it prior to 2002?
Why does it bother you that the house had a fire 22 years ago?

Hi Russel. it bothers me because they didn't disclose it and when asked about it they maintained they didn't know there was a fire and there have been a couple of other items they didn't "remember" that were in the disclosures. Also, there's no evidence that the issue was properly permitted/remediated so I will have to do more work to get comfortable. Apparently the house was stuck by lighting that caused the fire. Do you think I'm overreacting? I guess integrity matters to me.
Yes I do think you're overreacting.

Thanks, appreciate the input. How would you handle it if this was your deal?

I wouldn't care at all about 22 year old repairs. It wouldn't affect whatever decision I was going to make on a property.
[email protected]301-893-4635 Podcast Guest on Show #192
District Invest Group545 Reviews
Website View Page
0 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
2y
Why would you be walking away from $10K? You should be in the due diligence period. Is it possible the current owner didn't know about the fire (ie it happened before they bought the place and it wasn't inspected)?
For some places if the damage was repaired, they may not need to disclose it-not sure about fires. I had a friend whose house had major structural issues as an underground pipe wasn't sealed off. They got it fixed after suing the developer and their lawyer said that now that it is fixed, they didn't need to disclose it when they sold...they did sell it AND disclosed it to the seller and provided them all of the paperwork and warranties.
0 Reply
Andres Ruiz
OP
Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes
2y
Quote from @Theresa Harris:

Why would you be walking away from $10K? You should be in the due diligence period. Is it possible the current owner didn't know about the fire (ie it happened before they bought the place and it wasn't inspected)?
For some places if the damage was repaired, they may not need to disclose it-not sure about fires. I had a friend whose house had major structural issues as an underground pipe wasn't sealed off. They got it fixed after suing the developer and their lawyer said that now that it is fixed, they didn't need to disclose it when they sold...they did sell it AND disclosed it to the seller and provided them all of the paperwork and warranties.

Thanks Theresa. I'm not planning on ever selling but yes, I would disclose this in the future. It's always better to be transparent, rather than hide something.
0 Reply
David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
2y
How was the past fire discovered? What evidence remains?
0 Reply
Sebastian MarroquinPro Member
Real Estate Agent · Pasadena, CA · Member since 2015 · 477 posts · 263 votes
2y
This may not be a big deal like many people are saying… but this is a huge purchase for you so why not do as much due diligence as possible.
I would get a structural engineer to the property. Most would charge about 800 to $1k to do the observation. It has been many years since it happened… so you should be fine… but doesn't hurt to check.
Also think about future for the property? Will you keep it forever? or will your rent it out or sell it in the future.
The next buyer will also inspect it and will also have a problem with evidence of previous fire…
So it will help to have an engineer look at it and say it is safe to live there.
It's all about you feeling safe in it. If you feel this would help, simply do it! Same for the foundation, roof, electrical and plumbing systems.
Good luck
0 Reply
Gaudys Rivas
MIAMI LAKES, FL · Member since 2014 · 41 posts · 18 votes
2y
Whatever you decide to do , stay away from fire remediation companies , they will give you a huge overpriced estimate
0 Reply
Andres Ruiz
OP
Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes
2y
Quote from @David Dachtera:

How was the past fire discovered? What evidence remains?

Hi David, the inspector found evidence in the attic and modifications/repairs to the framing.
0 Reply
Andres Ruiz
OP
Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes
2y
Quote from @Sebastian Marroquin:

This may not be a big deal like many people are saying… but this is a huge purchase for you so why not do as much due diligence as possible.
I would get a structural engineer to the property. Most would charge about 800 to $1k to do the observation. It has been many years since it happened… so you should be fine… but doesn't hurt to check.
Also think about future for the property? Will you keep it forever? or will your rent it out or sell it in the future.
The next buyer will also inspect it and will also have a problem with evidence of previous fire…
So it will help to have an engineer look at it and say it is safe to live there.
It's all about you feeling safe in it. If you feel this would help, simply do it! Same for the foundation, roof, electrical and plumbing systems.
Good luck

Thanks, Sebastian. This is going to be a long-term rental and although I won't be living in it, I want my tenants to be safe and feel comfortable if I ever need to sell it so will be doing through extra diligence. Maybe I'm overreacting but it will help me sleep at night so it's worth it.
1 Reply
Crystal SmithPro Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2014 · 3k+ posts · 1k+ votes
2y
Quote from @Andres Ruiz:

Quote from @Andres Ruiz:

Quote from @Chris Seveney:

@Andres Ruiz
So there was a fire 20+ years ago and the property was repaired - what’s your concern???
If it was large enough they would not have gotten a new certificate of occupancy, live in the property or been able to refinance or get another insurance policy
I don’t see this as being an issue / big deal.

Thanks, it's the first time I've had this come up so appreciate thoughts on this.

How would you handle it, if this was your deal?

How I would handle this if this were my deal?

If the contract included a due diligence period that allowed for the return of EMD and the numbers on the deal made sense, then I would request an extension on the EMD and hire an architect or structural engineering to review the area pointed out by the inspector. If the repairs are sound I would close. If the repairs are not sound I'd get an estimate to fix it and request a price reduction.

I may also decide to do nothing- If I find evidence that the modifications were done using permits and passed the city inspection & maybe even obtained occupancy certificates then I would just close on the deal.

If I had submitted a non-refundable deposit but the financials still made sense I would still go through the same process. (By the way- I would never do a non-refundable deposit until all due diligence is completed)
312-681-7487
0 Reply
Andres Ruiz
OP
Investor · Bay Area, CA · Member since 2022 · 22 posts · 19 votes
2y
Quote from @Crystal Smith:

Quote from @Andres Ruiz:

Quote from @Andres Ruiz:

Quote from @Chris Seveney:

@Andres Ruiz
So there was a fire 20+ years ago and the property was repaired - what’s your concern???
If it was large enough they would not have gotten a new certificate of occupancy, live in the property or been able to refinance or get another insurance policy
I don’t see this as being an issue / big deal.

Thanks, it's the first time I've had this come up so appreciate thoughts on this.

How would you handle it, if this was your deal?

How I would handle this if this were my deal?

If the contract included a due diligence period that allowed for the return of EMD and the numbers on the deal made sense, then I would request an extension on the EMD and hire an architect or structural engineering to review the area pointed out by the inspector. If the repairs are sound I would close. If the repairs are not sound I'd get an estimate to fix it and request a price reduction.

I may also decide to do nothing- If I find evidence that the modifications were done using permits and passed the city inspection & maybe even obtained occupancy certificates then I would just close on the deal.

If I had submitted a non-refundable deposit but the financials still made sense I would still go through the same process. (By the way- I would never do a non-refundable deposit until all due diligence is completed)

Thanks, Crystal. I appreciate the thoughtful response very much. The property is in North Carolina and I wanted to make a strong offer so I put a higher due diligence fee which becomes non-refundable unless the seller is in material breach which I would argue this is but would take take time settle.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.