Warranty on rehab not being fulfilled

Warranty on rehab not being fulfilled

Investor · Oviedo, FL · Member since 2015 · 7 posts · 6 votes

We purchased a Chicago refurbished duplex, from a 'reputable' developer - #Profitfromrentals. http://www.profitfromrentals.com profitfromrentals

The deal specifically includes a warranty for all workmanship for 12 months and a warranty on all maintenance repairs for 6 months. 

Based on our situation described below, I want to know - How valid is a warranty provided by the developer in the sales contract and What is the recourse to enforce it? And what about further losses resulting therefrom?

Unfortunately 6 weeks post handover there is a serious water pipe issue causing damage and frustration to the tenants. We immediately notified the developer only to learn that he had some serious health issues and is not contactable.  

With the help of the marketing agent #Maverick https://www.maverickinvestorgroup.com  who have dealt with the developer for 5+ years, we were able to contact the appointed power of attorney for the developer. 

This is his response - 

I suggest you make the repairs or lose your tenant at this property. 

We recommend your property owners to immediately enroll into the American Home Shield......

Whilst we understand the predicament - this is not a "one-man" business and surely the contractual obligations remain in force?

Any advice will be greatly appreciated!

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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    9y

    @Kim Koetsier - it would depend on the wording of the warranty.  I am not a lawyer but you may want one to review the contract and clarify. 

    @Justin Ericsson

  • Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
    9y

    @Kim Koetsier Take care of the repair of course asap. document the costs and such. Then seek out an attorney for their advice. Hopefully this is the only issue you have. Also if the damage is sever enough turn into your insurance company. They may then go after the developer who sold you the property.

  • Investor · Oviedo, FL · Member since 2015 · 7 posts · 6 votes
    9y

    Thanks @Alex Deacon and @Brie Schmidt  - I've taken your advise and contacted an attorney, the contract is very clear but I fear we will need legal support to enforce it. 

    We will need to move ahead with repairs asap - but don't want to invalidate the warranty / insurance cover. 

  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    9y
    Originally posted by @Kim Koetsier:

    We recommend your property owners to immediately enroll into the American Home Shield......

    Whilst we understand the predicament - this is not a "one-man" business and surely the contractual obligations remain in force?

    Any advice will be greatly appreciated!

    The advice on buying American Home Shield is only good for future purchases.  Unless they have changed their rules American Home Shield warranty is only available when you purchase the property.  You can't buy it after the fact.

    The recourse to enforce a warranty in a sales contract is to threaten the developer via your attorney.  HIs suggestion that you make the repair or lose the tenant means he's not going to do the repair.  

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