condition report untrue

9 Replies

I am days away from closing on a duplex and completed the final inspection. It rained the day before and I noticed the basement floor was wet along with the lower portion of the walls. The condition report stated the owner did not know of any defects in the basement or foundation but the tenant mentioned they did not use the basement because the current owner told them the basement gets wet when it rains. I am not sure if I am required to inform the bank of a falsification of the condition report but I am pretty angry at the seller as I have a certain amount allotted for repairs and waterproofing the basement was not in the budget. If I had known of the seepage issue I would have negotiated a lower price or an amount escrowed to repair this problem. Has anyone had an issue like this before?

It’s never too late to go back to the drawing boards. Until escrow is closed, everything is negotiable. 

Of course, I am assuming you have not removed your inspection contingency.

To your success!

Read the fine print on your state's "Seller Disclosure" form.  Contact appropriate contactor for basement water remediation, get a written quote.  Get tenant to sign (and get notarized) a statement that the seller informed them about not storing anything in the basement.  Bring all this with you to closing.

Demand 2x the costs as reduction from seller and let the seller know how much the Dept of State and Attorney General frown on seller fraud on disclosure statements.  Sit back and enjoy the show.

Nah, I'm just kidding.  

Have a mason or GC check the exterior and give an estimate of getting the water diverted.  It might just be a mis-directed or badly aligned gutter.  Tell the seller you want that amount in full as a credit.  Be prepared to walk away from the deal.  Tell the seller, "Don't BS as BS'er".

Yup, there ya go.

@Marc Winter as much as I would like to get a contractor out before closing(I will call tomorrow). They would have to be there the same day and have an estimate done before Tuesday afternoon when we are set to close. I assume by the replies that I can push the closing back due to the results of this latest inspection while I wait for the contractor estimates. Were you serious about having to get a notarized statement from the tenant or is the presence of water enough to force the seller into further negotiations?

90% of basement water problems are solved with down spout extensions. 5%, a cheap exterior french drain. Very few require anything more than that.

@Chris Matheson

Either 
. Get a settlement extension of 1 to 2 weeks to give you time to evaluate leak
. Negotiate a low price based on estimated repairs
. Settle if seller willing to  Escrow all or a portion of Seller proceeds until you have leak evaluated.
. Be willing to make the hard decision if necessary.

Photos of the damp/wet basement are sufficient

@Chris Matheson ,

I was only partially kidding about the notarized statement.  That would only be necessary in a further down the line court proceeding. 

BTW, don't use dirt to make the slope away from the house.  Use (what we call in NEPA) modified gravel.  It's the gravel used under roadbeds.  It compacts down and becomes water-impervious as opposed to dirt which can absorb moisture and could continue to cause moisture.