Buying house unknowingly with violations

3 Replies

Can you unknowingly buy a house with violations on it that stick with the house? 

Maybe we've just been lucky so far, but we never got a house with any violations on it. We've had unpaid utility bills with one of our houses, but those stick with the individual luckily. 

I was told by our lawyer that having clear title doesn't make it certain you won't get a house without any violations. Title insurance only protects against liens, but if it's violations before they've turned into liens that's where it could be an issue. He said that was our responsibility to find out if there are violations. 

How do you guys make sure the houses you buy don't have violations on them? Is it not the responsibility of the lawyer or agent to find this out; or I thought the city/village would have to disclose that when releasing over the transfer stamp.

If you are talking about violations such as being caught by the code inspectors for illegal additions and dangerous living conditions,you personally are responsible for performing the due diligence at the city code enforcement office.You should always look at the city property records for possible previous violations being cited and filed against the property.Real Estate agents do not bare the legal responsibility to seek out possible property violations from the government.Agents are responsible to notify and disclose to the buyers any possible or definite problems that the sellers have made them aware of during their representation of the sellers.

my title company tells me this and then I go back and negotiate the terms of the deal

If you’re in this game long enough you’ll see just about anything.

I was involved in a sale of a property where a city code violation was assessed but not recorded until after the sale.  The paperwork was literally on a bureaucrats desk at closing and even though another city official gave the title company a written assurance that no code enforcement action was pending, it still went through and the buyer ended up with the lien on their property.

In this case it was later settled three ways, by buyer, seller and title company.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.