Good day fellow investors. I need advise. I purchased an investment property, my first, in October 2019 in the Tampa, FL area. It’s a townhouse. The seller on the disclosure stated that the property has no sinkholes. Come to find out this week when trying to search for new homeowners insurance that in 2008 there was a remediated/stabilized sinkhole. Now I am having a difficult time finding homeowner’s insurance. I would have never purchased the property had I known this. I wanted some advise on what I can do. As I have the seller disclosure attesting that there is no sinkhole when there is in fact what actions can I undertake? Thank you
Flipper/Rehabber · Leominster, MA · Member since 2020 · 667 posts · 384 votes
6y
Check your P&S; you may have recourse if the Seller made specific representations. Issues like this are common in competitive markets, because Sellers force competing Buyers to purchase properties 'as is'. 'As Is' is a very broad term and if it is in your P&S, it likely closes the door on any recourse you will have.
We have standard offer paperwork with preset contingencies; this is a useful tool as you develop your real estate investment business.
As it pertains to your specific issue, have the Attorney that represented you at the closing review the contract and the Seller's representations. All of your recourse will be tied to the Contract for the sale of the property.
Flipper/Rehabber · Leominster, MA · Member since 2020 · 667 posts · 384 votes
6y
Check your P&S; you may have recourse if the Seller made specific representations. Issues like this are common in competitive markets, because Sellers force competing Buyers to purchase properties 'as is'. 'As Is' is a very broad term and if it is in your P&S, it likely closes the door on any recourse you will have.
We have standard offer paperwork with preset contingencies; this is a useful tool as you develop your real estate investment business.
As it pertains to your specific issue, have the Attorney that represented you at the closing review the contract and the Seller's representations. All of your recourse will be tied to the Contract for the sale of the property.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
6y
@Sarah Johnson welcome to BP. Sorry for your troubles. I would start with my RE agent and get advice from him/her and look over the Agreement. Your agent should have ferreted this out one way or the other and advised you. All the best!
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
6y
Aint no sinkhole here...anymore...we filled that in...did I not make that clear? Whoops. I thought you meant are there any sinkholes presently! Well I got some dirt for sale if you need some.
Florida and it's sinkholes. I'm trying to make light of this sinking proposition... too soon?
In all seriousness, there has got to be some precedent for cases like yours in FL. I'd start there. Perhaps lawyer up? Lawyer consult might be worth every penny if you can't find answers quickly.
Real Estate Agent · Oakland, CA · Member since 2019 · 37 posts · 40 votes
6y
@Sarah Johnson Sorry to hear that, start by referring to your purchase and sale agreement. Have the agent that represented you look over the agreement, they should have pointed this out to you prior.
This is why we put certain contingencies in the contract to give you not only time but an option to back out when surprises such as this pop up. If needed, you could get a lawyer and ask for their professional opinion.
Best of luck, don't let this small setback stop your investing career! Great learning lesson!
A friend bought a new house and the developers forgot to close off some pipes underground. House ended up with major structural problems and the developers had to fix it after lawyers got involved. After 5 years they wanted to move and the lawyers told them they did NOT need to disclose the problems as it had been fixed. They still chose to let the sellers know and passed along all the warranty details.
So because it was fixed, they may not be required to disclose it. Find out your local laws.
Flipper/Rehabber · Leominster, MA · Member since 2020 · 667 posts · 384 votes
6y
I disagree with Bjorn Ahlblad, Agents are not Attorneys or Contractors; Agents facilitate purchases in the real estate market. This is important, Agents are not qualified to make substantive judgments on areas beyond their practice. Agents do the best they can & they should be reading through agreements and doing their best to guide you, but at the end of the day an Agent is not accountable for representations made by a party to a sales contract by a Seller or a Buyer.
I do not write this to duct responsibility, I write this so that there is some clarity as to how an Agent's area of expertise/practice should be delineated. I am an Agent, I do not rely on other Agents when I make purchases or enter into contracts - I force my Attorney to walk me through all of that, if he fails give me good advice then I have recourse through him.
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
6y
As I have the seller disclosure attesting that there is no sinkhole when there is in fact what actions can I undertake?
Am confused. If the sinkhole has been remediated, then why not go after the contractor since you should ask for warranties on physical improvements (assuming they're transferable).
Again, READ YOUR PSA AND DISCLOSURES - We don't get sinkholes in OR, but if he remediated it, I guess you could say there are none, unless the disclosure asks if there have ever been any.
Real Estate Agent · Tampa, FL · Member since 2015 · 3 posts · 1 vote
6y
Sarah, I'm an Agent in Tampa and i second what Moises R Cosme has said above.
I would suggest you retain a Realestate attorney as well. Unfortunately some sellers are not upfront about their property even on their disclosure, which they will always lose at the end!
Also if you can get the completed Engineering report from HOA Manager, As long as The property was remediated then it should be insurable.
Recently i sold a condominium with sinkhole in the property in Tampa and I had all disclosures and engineering report Attached to the listing (I represented the seller) and sold it without any problems for the buyer.