I am in a unique situation and I am not exactly sure how to proceed with it. Here is the story. I sold a flip house approximately a little over a month ago. The house was sold FSBO with no agent on the other side either. The home inspection passed and so did the appraisal without any issues. The buyer called me last week and was asking me where the main drain on the house is. I also wasn't aware where it was. He then proceeded to tell me that his water had clogged up throughout the house and the plumbers were on scene handling it. I felt bad for him, but there was nothing I could do to help him. While I had the house in my possession everything was checked out by my plumbers and determined to be In a good working order. I had no knowledge of any issues. On the positive note, I paid for his home warranty and advised him to use that to cover the expenses.
Today, the buyer texted me. He stated that He is having issues with the plumbing and the plumber came out for the second time. This time the plumber told him that the sewer pipe collapsed and it would cost $6200-$7800 to replace it. He stated that he called the warranty company and they advised him that this item will not be covered on the warranty. He than stated that after having a discussion with his wife they believe that I should be responsible for paying half of these expenses. I am not really sure what to do. I haven't responded to his message. Can I please get some input? Thank you in advance for all the responses.
@Huso Akaratovic Why not get your plumber out to look at it? When they moved in, is there a chance they could have parked a heavy truck on the lawn and caused damage?
@Theresa Harris , Thank you for the reply. I am honestly not sure what happened and what they did once I sold the house. I am trying to figure out now what I need to do, and if anything at all?
In general, all house sales are ‘as is’, as in after closing, the responsibility is totally on the buyer for anything that breaks or doesn’t work.
The only exception to this is if the seller intentionally or fraudulently tried to cover up a defect.
In my (non-lawyer) opinion, since you didn’t touch the sewer pipe during the flip, it’s 100% not your responsibility.
If on the other hand, it was a backup in some pipes you did replace, and they were done incorrectly - and you knew about it... then yeah, I would have a different opinion.
The pipe was likely collapsed for a while now. But since you weren’t living in the house, it never came up as a problem. You weren’t taking showers, etc, so even if it was a problem, you never would have known.
If I were you, I’d do two things:
1) read the home warranty and see what it says about plumbing. Home warranties are notorious for disallowing claims that they should cover. If in your opinion they should cover it, let the buyer know they should pursue it.
2) respond that your renovation didn’t include the sewer pipe. All your contractors didn’t indicate it was an issue, so it’s not something you had knowledge of. And decline paying.
Good luck! I know it’s a frightening letter to receive, but I truly believe you’re in the clear.
Unless you have a builders warranty (not a home warranty from First American, etc) with them you most likely don't have any obligation to make any repairs. Buyers had the opportunity to perform due diligence by scoping the sewer line and they need to take ownership and use this as a learning lesson in my opinion. Seems like something that was out of your control unless you knew there was a break in the line.
That said, this just happened to me a few months ago with plumbing and HVAC issues that popped up a few weeks after closing but I was able to work with contractors who warrantied their work and get it fixed. Always good to be a good human and do the right thing.
@Mike McCarthy @Cory Robinson .. I appreciate your feedback. As I have mentioned earlier. I was not aware of any of these issues. We did not perform any plumbing issues on the sewer line. Once all the toilets and faucets were installed. We completed a test inside the house and also checked to make sure there were no leaks in the crawl space, everything was working good. My conscious is clear, because I know I haven't done anything wrong. I take a lot of pride in my work and always do the right thing and correct the problems as they present themselves before we sell the houses. I feel bad for him, but at the end of the day, this is a business. All this comes with a territory of being a homeowner. I don't want to set a tone and start entertaining this guy and expect him to call me anytime he has an issue with the house. As far as the home warranty goes, I don't want to start interpreting that and get into another debate of what should've been covered or what not. I paid for the home warranty,, again as a homeowner he needs to call them and verify everything. At first I was concerned about the legal issues, but again anybody can sue anybody. Proving the case in court would be very difficult, because I did not have intent and did not maliciously do anything wrong.
Did the buyer have an inspection done prior to purchase? Did you scope the lines when you bought it to inspect the plumbing? I have the lines scoped when I buy an older home to make sure this kind of thing does not happen. It also helps that my son is a plumber with the line inspection camera.
@Thomas Hundtoft He has done a home inspection and everything checked out good. I did not scope the lines. This is something to consider moving forward.
In my opinion they had an opportunity to do due diligence. You did not know of the issue so I would not pay for repair. If you pay for half, next week there is going to be a faulty hinge on a door they decide you should cover. In 3 months there is going to be a furnace issue. 5 months there are some areas where the paint is thin and we think you should have someone come out and repaint at least two rooms. It will never end until you say no.
@Mike Cumbie I feel the same way.
Some states are more Caveat Emptor (buyer beware) than others.
in WA, all sellers must complete a condition disclosure. We are buyer beware, unless you're too ignorant / unaware to complete the disclosure. FSBOs seriously need to know the laws.
Research your state to see if a disclosure is required. If it is and it wasn't completed, you may be out the $4k. If so, count your blessing it isn't worse.
Otherwise, I wouldn't reimburse. Like @Mike Cumbie mentions, they could ask for stuff in perpetuity. I'd imagine VA is a buyer beware state. Double check.
@Steve Vaughan I’m sure I have it in the contract where it’s as is. I look into all of that. Thank you for the feedback.
Seller makes GOOD FAITH EFFORT to protect buyer with home warranty at closing. Did BUYER HAVE AN INSPECTION? "YES" Who can predict when systems are going to break.
Buyer has INSURANCE ON PROPERTY for this type of issue.
In the State of Washington, the term "AS IS" would be pertaining to an item or thing within the home and not the entire home unless all defects have been disclosed to buyers or a statement of non-inhabitable has been issued. This statement has been sued and lost upon by many of sellers in the State of Washington, BUYER BEWARE.
@John Barrows thank you for your input. It’s unfortunate circumstances for the buyer. However, these things are unpredictable. Fortunately as you stated he has a home warranty and insurance on the property.
Be careful how you speak to him. You can express sorrow for what he's going through but not make it sound like you're accepting blame. "I'm sorry for what you're going through" tells him you're human and sympathize without being responsible for the problem.
On the other hand, if his scope reveals construction materials in the sewer pipes, he may come after you. We all know that sometimes subcontractors do stupid stuff that we were not aware of, but can still be blamed for.
Good luck !
To me there are a few things to consider. If you are a full time flipper and cover this you are setting a standard for all future flips. Depending on where that line is will really determine what I would do personally. If the line is in an area that I had tricks on or material stored and if the line is shallow I’d probably take care of it because I want to make sure what I do it down right. If the line is somewhere that the new owner drove over it’s on them. If you look at a collapsed pipe you can tell What the cause is in many cases. A sewer scope is a few hundred bucks and can tell you if it’s due to vertical load, horizontal load or root intrusion. If it was cause by you pay for it and move on. If it wasn’t offer a fair solution because doing what is right always pays off in the long run.
@Huso Akaratovic in this case looks more like your letting emotion take over. If the house is bought and no warranty on the property. That’s it, it is what it is. Tail light warranty! Like anything else you buy a car of someone and it breaks down are you responsible for it? At least not we’re I’m from. Good luck but don’t fold.
If this is your main business, then you do need to consider your reputation. ITs a few thousand dollars that may come back to bite you in the future when you try to sell your next flip. Your reputation as a flipper can be changed by just one person having an experience like this. The cost of a new sewer pipe to someone wo just bought a new home can be more than they can bear.
Can you help by seeing if your usual plumber can do it for less? Is the quoted price decent? Can trenchless technology like pipe bursting be used to save money? How did that deal go, is it affordable to cost share the fix?
What you are legally required to do and what would be best for your business may be different.
@Huso Akaratovic . You can be nice and pay for half or you can tell the buyer to pound sand in a polite manner. You don’t need to do anything, legally speaking. Morally speaking you may want to do something.
I would generally agree with the other comments here. What I can tell you from experience with home warranties is that they rarely cover any sewer lines once they are underground and outside of the structure. I'm assuming they won't cover this.
Your reputation does matter, especially if you are a full time flipper. If you need to spend a little cash to keep your reputation at a high level, do it. I would, however, get something in writing stating that you were not legally responsible for this situation and that you will not provide any further assistance if other matters arise. I'd see if the new owner's insurance works cover this. If so, maybe offer to pay the deductible.
If you don't feel obligated to help pay for anything (and don't have any legal obligation based on State laws), don't feel bad and simply move on.
Remember, this is not legal advise, simply my opinions as a Realtor and flipper. Best of luck.
If I had a nickel for every time a plumber said the sewer pipe "collapsed"
I would get a plumber(someone trustworthy) and have them do a video. Best if you can be there and see it live.
At that point you will have all the necessary info you need.
If there really is a problem and you made good money on the flip I would help them out in someway, keeps you out of court...
It also could just be a backed up sewer line....
@Huso Akaratovic one question for you, did you do a sellers disclosure? I know that eliminates any recourse. This is more of a emotional decision, not a business one. If it passed inspection, this guy has to eat it. If you want to help the guy, then you can out of good will. The ONLY reason this owner can contact you directly is due to your FSBO. IF he had a realtor, he would never make the call. Best of luck!
@Huso Akaratovic hmm... I’d be curious to find out if this actually should be covered in the warranty and the company is pushing them off. The “sewer” line can’t be a pipe in the city street, it’s just a pipe buried in the ground a couple feet down. Maybe review the warranty details. They may not have communicated this properly to the insurance company. Otherwise, you’re not responsible for this anyways and shouldn’t lose sleep over it. This kind of repair should not cost 6-7k. If a line is collapsed, they need to have the plumber they paid tell them where in the yard, then have someone dig it up and repair it for $1000. There’s no way this thing is collapsed all over the yard. Maybe try to redirect them to a better solution and just show them you really wish you could help more but it’s their responsibility overall..
Don’t know if it’s been said already, talk to a lawyer prior to responding. Your wording could seal your fate.
Also the sewer pipe collapse could be a municipality problem. Depends on where.