Disaster in my Realestate business please help

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Disaster in my Realestate business please help

Mark Suliman
Investor · Tampa, FL · Member since 2015 · 24 posts · 4 votes

so the story started 5 month ago I bought a home in land o lake Florida through home search.com I closed on it may I got title insurance at closing I renovated the entire home I put up for sale and got it under contract in 1 week inspection was good appraiser good we have closing on 11-6-2015 this morning I received email from the title company I chosen asking me if I have disclosed that the home had a sinkhole permit to test the property was pulled in 2011 that was a shocking to me since the title company I used to buy the home did not disclosed any of this to me I had a realtor also at that time and right befor closing I asked home to check the closing papers and title commitment and he said it look good I don't know what to do at this point I checked with the county if permit was pulled to repair the sinkhole found nothing I paid cash for this home am in about $165000 what do I do please help

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Karen MargraveBusiness Member
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Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
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@Mark Suliman Don't panic.  In the past there have been stories out of Florida of sinkholes that swallowed cars, homes, etc. In 2013 one opened up and a man was killed when the house opened up. Testing for something is due diligence. The fact there was a permit pulled, doesn't even mean it was tested. However; even if it were tested, doesn't mean it was tested because of a sinkhole, but to insure it didn't have one. 

If there is no law stating you have to disclose if a permit is pulled if you're testing for a sinkhole, and no law stating that someone doing such tests have to record them, then you're in the clear. It's probably nothing to worry about. 

You might want to go back and read the title report, and if you aren't familiar with them, ask the title company to go over with you and explain where that information would be found. Good luck. 

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  • Devan Mcclish
    Investor · Nashville, TN · Member since 2015 · 688 posts · 607 votes
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    This potentially sounds like a bad situation. Ultimately it was your responsible to discover the house was in a sinkhole when you bought it. Since it was home search (I don't even know what that is), I'm assuming the house was a foreclosure, if that's the case, banks make no warranties or guarantees associated with the house, and they ask you do your own due diligence.

    Check the permit that was pulled in 2011, see if any work was recorded to fix the issue. If not, you will have to ask the city what you need to do from there. Also, talk to your attorney and ask them what the process is

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  • Mark Suliman
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    Investor · Tampa, FL · Member since 2015 · 24 posts · 4 votes
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    thanks devan  I checked with the county and no work been done my question since I had my closing in title company and they gave me title insurance wasn't there responsibility when they did the search (am sure they didn't missed the recorded permit for the sinkhole testing) to disclose the info with me ,I just called a lawyer an I have a Monday appointment 

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  • J ScottPro Member
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    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
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    Pulled permits aren't going to be a title issue.  So, the fact that permits were pulled to test/fix this issue isn't going to be on the title company -- that's on you.

    I'm actually a little surprised that the new title company found this information -- unless the county somehow clouded title due to a permit not being properly handled.  Don't know if they can do that, but can't image how else the title company would have found out or cared.

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  • Mark Suliman
    OP
    Investor · Tampa, FL · Member since 2015 · 24 posts · 4 votes
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    thanks j Scott I have another question know since I know about this its my obligation to disclose that to the buyer i have a contract with how would you Handel this 

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  • J ScottPro Member
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    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
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    Originally posted by @Mark Suliman:

    thanks j Scott I have another question know since I know about this its my obligation to disclose that to the buyer i have a contract with how would you Handel this 

    Well, when you didn't know about it, you had no obligation to disclose.  But, now that you do know about it, you're legally required to inform the buyer.

    My suggestion would be to figure out how much it would cost to remediate, and then try to negotiate a discount with the buyer.

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  • Karen MargraveBusiness Member
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    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
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    @Mark Suliman Don't panic.  In the past there have been stories out of Florida of sinkholes that swallowed cars, homes, etc. In 2013 one opened up and a man was killed when the house opened up. Testing for something is due diligence. The fact there was a permit pulled, doesn't even mean it was tested. However; even if it were tested, doesn't mean it was tested because of a sinkhole, but to insure it didn't have one. 

    If there is no law stating you have to disclose if a permit is pulled if you're testing for a sinkhole, and no law stating that someone doing such tests have to record them, then you're in the clear. It's probably nothing to worry about. 

    You might want to go back and read the title report, and if you aren't familiar with them, ask the title company to go over with you and explain where that information would be found. Good luck. 

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  • Mark Suliman
    OP
    Investor · Tampa, FL · Member since 2015 · 24 posts · 4 votes
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    thanks j Scott and thanks Karen I guess that's going to be my weekend research 

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  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
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    Let's tag @Wayne Brooks and see if he has anything to add to this. He's in Florida, and pretty smart...

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  • J ScottPro Member
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    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
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    Originally posted by :

    If there is no law stating you have to disclose if a permit is pulled if you're testing for a sinkhole, and no law stating that someone doing such tests have to record them, then you're in the clear. It's probably nothing to worry about. 

     That's a good point...

    I'm assuming there is an issue (and that's why the permit was pulled)...but if there is no known issue, and the permit was pulled simply to allow some tests to be run, then you probably don't need to disclose.  Though you would want to disclose that there are open permits, or better yet, try to close them.

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  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
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    Originally posted by @Mark Suliman:

    so the story started 5 month ago I bought a home in land o lake Florida through home search.com I closed on it may I got title insurance at closing I renovated the entire home I put up for sale and got it under contract in 1 week inspection was good appraiser good we have closing on 11-6-2015 this morning I received email from the title company I chosen asking me if I have disclosed that the home had a sinkhole permit to test the property was pulled in 2011 that was a shocking to me since the title company I used to buy the home did not disclosed any of this to me I had a realtor also at that time and right befor closing I asked home to check the closing papers and title commitment and he said it look good I don't know what to do at this point I checked with the county if permit was pulled to repair the sinkhole found nothing I paid cash for this home am in about $165000 what do I do please help

    So what cost are you going to be out.  Is this a $100 thing, a $1,000 thing, a $10,000 thing?

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  • Cal C.
    Investor · Peachtree Corners, GA · Member since 2014 · 1k+ posts · 1k+ votes
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    That is an awesome run on sentence!  Best I've seen on BP! 

     Good advice from @Karen Margrave and @J Scott- to me this seems like one of those things that could easily be what Karen suggested and amount to much ado about nothing.  

    3Reply
  • Ravi P.
    Boston, MA · Member since 2015 · 72 posts · 16 votes
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    I agree with the previous poster not to panic. situations like this probably arise a lot in your area where sink holes are prevalent. and pulling a permit doesn't mean that there necessarily is a sink hole. for now come to terms with the fact this will cost you time and a little money but you'll likely still come out positive when the house does sell

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  • Dana WhickerPro Member
    Investor · Fernandina Beach, FL · Member since 2014 · 557 posts · 374 votes
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    Absolutely no reason to freak out yet.  Inquire at the agency where the permit was pulled and find out if it was closed out or not.  Find out if an actual inspection was done.  

    There's a chance this could turn out ok.  

    If an inspection was performed and no evidence of sinkhole activity found, you will gladly disclose this as a positive.

    1Reply
  • Mark Suliman
    OP
    Investor · Tampa, FL · Member since 2015 · 24 posts · 4 votes
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    thanks every one for the help am really thankful for your time and concern I reach back to the title company asked here about where exactly got the info she said that the permit was established on 2-1 2011 and closed on 03-01 2011 and the report was recorded its 5 pages indicated that a sinkhole exist and they have recommend the amount of grout that needs to be poured she also called to se if a permit was pulled to fix the sinkhole and found nothing so I have a not repaired sinkhole I have no idea to what the cost , the home is about 2500sf the thing that am after why did the title company hide out this from me when I bought it 

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  • J ScottPro Member
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    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
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    The issue doesn't affect chain of title, so there's no reason for the title company to flag it or hold up closing. Not sure why your title company I flagged it, but since they did it is now your responsibility to disclose the defect to the new buyer or to fix it before you sell.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
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    I'm surprised the title co. found it.  In Florida, an open permit/work done without a permit is Not a title issue, as indicated in our state FARBAR contracts.  Title generally has nothing to do with the structural integrity or defects.  It seems you Didn't have a disclosure issue before, but you Do have one now.  As an aside, I always look at previous permit activity for any purchase, as they are almost always online. I haveNo experience with sinkhole remediation, but since there was an a recommended fix, the cure should be easy to determine.  However, with a sink hole history, I think that is an automatic exclusion for future insurance policies, which will be a financing problem.

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  • Doug N.
    Lynnwood, WA · Member since 2015 · 221 posts · 157 votes
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    @Mark Suliman I have nothing on sinkholes or disclosure requirements, but one thing I can tell you is that your keyboard is missing the period and question mark keys. I have a few spares, pm me for your address. Best of luck!

    1Reply
  • Mark Suliman
    OP
    Investor · Tampa, FL · Member since 2015 · 24 posts · 4 votes
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    thanks Doug I was stressed you put a smile on my face 

    2Reply
  • Account Closed
    Investor · Denver, CO · Member since 2012 · 105 posts · 26 votes
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    @Mark Suliman - you've got to try using periods and paragraphs. They will change your life!

    1Reply
  • Mark Suliman
    OP
    Investor · Tampa, FL · Member since 2015 · 24 posts · 4 votes
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    thanks Wayne 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
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    @Wayne Brooks  I recall running into this on some loans we did in Florida in the day and our insurance would cover it.  Not title insurance our hazard insurance.  Now this being what it appears to be a pre existing condition that could be an issue with this persons current policy.   Checking permits is now on my to do list for Florida Notes.

    But if the facts are correct, and permit was pulled, and closed in a month. Then possibly this is a non event..

    @J Scott  agreed very strange title would find this unless there was something of record that was creating a lien or encumbrance like a code violation that gets recorded.. And if for some reason this is of record then @Mark Suliman should go back to whoever wrote his original policy and make a claim.

    @Karen Margrave  good advice on the subject.

    @Doug N.  I went through and double checked and threw in some extra comma's even though I am not sure they fit were I put them .  I never want to be accused of bad grammar or punctuation which of course is my signature at BP{

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
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    @Jay Hinrichs Yeah, not sure how the whole sinkhole remediation permitting thing goes, as we don't have them down here.  It seems there an "inspection/testing" permit, but no actual remediation/construction permit, so I assume it was nevr"corrected".  This actually seems like am tile co. Doing extra, unrequired work....how blasphemous!

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  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
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    to me it all depends on whether the permit being closed means being satisfied is there a way to call the permit office and get a reference of the co that provided the work if the permit closed means work was done than you should be good but hard to tell based on limited info and time frame four years ago wonder what the original cause or reason was for  pulling the permit in the first place if you find out please let us know thank you

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  • Mark Suliman
    OP
    Investor · Tampa, FL · Member since 2015 · 24 posts · 4 votes
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    thanks every one, (Steve) what I learned is the permit that was pulled is for the engineering firm to do the testing (they have to pull permit because there test requires drilling ) when they finish they recorded the results ( sinkhole activities where on the property also they stated how to fix it ) later they closed the permit. The engineering firm dose not repair the sinkhole, normally after this report was created the owners of the property at that time they should of hire a contractor to fix it but in my case they didn't do that 

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  • Mark Suliman
    OP
    Investor · Tampa, FL · Member since 2015 · 24 posts · 4 votes
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    question I had a realtor represented me in this transaction this was email I sent to him before closing ((( Hi can you check the documents let me know if every think looks good ( deed,title insurance commitment. thanks))) and he replay to me with this ((( I do not see any problems.

    Thanks!)))) I know some of you guys are very experienced so you know how to find out all the hidden problems on property but for most people that don't have a lot of experience we think if we have a realtor, and we are closing in title company that going to give us title insurance we are covered by professionals that going to point out any problems with the deal???

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