Non-disclosed defect discovered, want seller to reimburse.

31 Replies

I recently bought a sfr in Seattle, closed December 22, 2015.  The inspector that charged me $400 for the inspection totally missed a one foot diameter area in the dining room along the garage side wall that when stepped on, sinks in about 3-4".

The floor had been recently upgraded to that floating laminate material.  The sellers did not disclose any defect, but it's obvious that they would have known about it, but covered it up with the new floor.

This apparently occurred from a water heater leak directly behind the dining room wall in the garage.  They had replaced the water heater but did not repair the drywall that had been affected, nor the wood floor under the common wall between the garage and dining room.  The inspector noted the drywall, but apparently did not think to go into the dining room on the other side to see if there was damage done to the floor!

We found this after we took possession of the house and immediately notified my realtor and the inspector.  The inspector returned for a look and told me that all he could do was  refund my inspection fee if I was not satisfied.  Needless to say I got my money back, but now I have to deal with estimates and repair, and I'm an out of state owner at this point.  This house was built in 1967, so instead of subfloor, the floor is actually 2 x 6 x 20 long planks.

Unfortunately, the house sold as "for sale by owner", so they didn't have a realtor, per say. Only enough of one to list their house on MLS. I'm not sure what to do.

My question is, has anyone prevailed by taking sellers to small claims court after getting repairs done, due to non-disclosure of a defect?

Did they give you a sales disclosure? If not you really probably don't have a case. You did an inspection and were satisfied with the results. 

You asked the home inspector for a refund because he didn't step on literally every square foot of flooring?

You already got $400 that he didn't owe you, I'd be happy/cut losses and move on.

How much will this cost to repair versus cost to sue?

That's right,  I expect a good inspection if I pay for it.  He offered it (he admitted missing it), and I accepted.  Thanks for your opinion, but he owed me, he knew it, and I'm glad he offered instead of my having to ask him for it.

This was so out in the open and the inspector totally missed it.  A good inspector with experience would know how and what to inspect.  But let's say that some people don't step on literally every square foot of flooring, that's fine, but I would not want to recommend such an inspector to my friends.  However, the repaired water heater and damaged drywall in the garage would warn a good inspector to double check behind and under the wall.  He did not and therefore he was negligent.  I want to go after the sellers who knew about this and covered it up with new floor.  I'll know after some estimates what the cost will be, but if I prevail, it will be no cost to me if under $5k in small claims.

So, my question was, anyway, has anyone won a small claims suit for this type of thing?

I'm really not interested in different philosophies about inspectors and their fees.  I got the fee back, and now want to recover the cost of repairing this floor.  This is a business as many people in BP agree on, and the issue is money and principle.

Not sure how it is treated in California. Here in NC you have the due diligence period and it is up to the buyer to use it. After closing it is all yours. 

@Carlos Enriquez  

Sorry to hear this happened to you.  Unfortunately I don't think there's much you can do.  Even if it had been listed with a broker, and even with the seller's disclosure it's typically a very long, expensive and time-consuming process to get anything out of the former owner.   As well, even if it goes to court there's no certainty that you will win, what amount you might get back, etc. even though your case is clearly strong.  

I have known this to happen to a couple colleagues of mine and the vast majority of the time the fault falls on the inspector. In the instances I'm thinking of, and and there are three, the buyers were never able to get a hold of the previous owners without incurring a huge expense themselves.

Sorry, wish I could give you some better news. Maybe there is somebody out there who was successful at this and could shed some light for the benefit of all of us.

@Carlos Enriquez   cost of litigating this vs fixing probably is not worth it. and since you did fsbo ... what sales agreement did you use.. if its standard WA form there will be mandatory mediation in these events.. if you used a Stevens ness form maybe not.  Mediator will want you to pay a deposit usually about 2500.. to get to mediation.

Seller probably knew of course.. but that's what you get when you buy un represented.. when you buy unrepresented you need to represent yourself a good RE agent probably would have caught this as well. So its up to you to discover this when YOU walk every square inch of the home after all its your money.

I suspect this is a suck it up fix it and move on issue.

@Carlos Enriquez   I did want to add for the benefit of any others that read this thread

that buying FSBO is all about Caveat Emptor DO NOT expect your sellers to be straight up 95% of the time.. either they don't know .. or it never bothered them so it should not bother you etc etc... and once they have their dough they are long gone.

Small claims may be the answer here if you think you have a case you can win. of course you would have to travel from Sonoma County to Seattle to do that.

Also home inspectors are people to... they miss things.. whether they should have found this I guess if he refunded your money.. but there is a way to go after the inspector if its egregious .

But welcome to long distance landlording... little things that you could handle when your property is right by you become eponentialy magnified when your buying out of area.   

I'm out of state so I couldn't walk the place.  Hence my trust of the inspector.  The house is in Seattle, and I'm in California.

The seller did a fsbo, not I.  I had a realtor, but couldn't force the seller to get one since they were adamant about that.

My realtor used the standard purchase agreement for WA.

Anyway, I'm just asking, because, whenever I sell a property, I'm always told to disclose everything, even if I think it's insignificant, because later it can bite me in the ***.

I am going to pursue this as far as I can without getting into a deep financial mess.  Perhaps, once the sellers are notified of this, they MAY decide to cover some of it and I would be satisfied with that.   After all, the issues that were discovered were fixed by the sellers before closing, so they may still be reasonable, especially if I gently imply about going to court.

@Carlos Enriquez ,

I suspect the inspector returned your payment not because he was egregiously wrong but because he didn't want to go through the hassle of you reporting him for doing a "bad" job.

Personally, I would chalk it up as a lesson learned (for me, the buyer), pay to have the problem repaired, and move on with my life.  So far, that seems to be the prevailing sentiment in this thread.

Everyone is different.  You may feel very strongly about taking this to court.  If you do, then just go ahead and file.  Just realize that as a long-distance landlord, you'll incur costs such as hiring a lawyer and/or traveling for the court date(s).  Make sure you're getting enough to make up for that, and to make up for your frustration of going that route.

Good luck

@Jay Hinrichs good points. I recently spoke with a FSBO that has now turned into a "I have an agent *friend*" that will call you (me the buyer). Initially, I spoke with the owner whose number I acquired from the agent sign in the yard. The agent said that they were trying to sell the property but since it had not happened and the listing expired, he gave me the owners number.

I talked to the owner initially and got some good information and wanted to proceed with looking at the property and present an offer. Well after a 2nd conversation (break for Christmas) just a day ago, she now wants to use this agent "friend" after I said that I would get my attorney to draw up a purchase agreement and get it over to her.

Clearly my conversation with her I know she doesn't want to proceed without using this agent "friend" of hers. Well I'm sure she is going to pay him "something". This raised several fine hairs on my neck - and I know I need MORE representation. I'll be calling my agent if/when her agent contacts me. Again, not sure what their relationship is so she may just be paying a pittance of % to him. I doubt it's 6%.

In another BP post I inquired about how to handle a FSBO that turned into a "well I really do have an agent *friend*" that I want to use. I could very well get my own agent involved but this started as a FSBO that I was just going to handle using my attorney.

However, after reading this post it reaffirms my need to have the right representation albeit that I believe my attorney who is versed in contracts, my RE agent provides and has provided more protection for  me for so many things that I still don't know how to handle.

@Daria B. on a simple buy of a SFR I don't think the Attorney is the key player here. Contracts are basically all boiler plate.

What is key is the inspections.  as denoted above.. And other things that may be germane to that area that a good RE agent would know to look for or ask about.

Keep in mind out here on the west coast we NEVER use attorneys for SFR purchase's , we use a good agent and a title and escrow company.. A good Agent is what you really need.

they actually get out in the field and look at your property.. attorney just sits in their office and rights a contract  LOL... not that you can't go that route..

@Jay Hinrichs LOL yes that is true about attorneys. I acquiesce to them for their knowledge of writing and interpreting contracts. 

In addition to just being the closing attorney chosen by the seller, they also look over or can prepare the purchase contract for the FSBO.

On a last deal (didn't work out) that was a REO (At that time my agent forwarded the contract with the addendum to me.) I contacted the closing attorney so he could look over the addendum that I found out was included "with" the purchase contract.

I am in tune with doing inspections, something learned from my agent in the past. I have 3 companies that I can call at a moments notice.

I advise all my clients that disclosure forms are worthless. Sellers lie, plain and simple. Proving that they are lying is nearly impossible.  The cost of litigating against undisclosed defects is too high, and a waste of time. Never trust what is in the disclosures.

 I occasionally am contacted by people from out of the area who want to buy a house site unseen, and I do not allow them to do so.  I feel my liability would be too high if they encountered an issue like this. I tell them rent for a short time when they move here and then we can start shopping for them. I also have a few investor clients who are interested in buying out of state, and I try to explain to them the risks in doing so....that you are putting your trust in people who you have no relationship with. Some listen, some dont.  

I agree with Russell, with the caveat that sometimes sellers just don't know one way or the other. I think your burden of proof in proving that the seller knew the floor was rotted would be specious at best and you would be best served by just moving forward. Besides, how expensive could replacing a 1 square foot area be? Last year I replaced an entire subfloor in a bathroom for just a few hundred dollars. Use the money you got from the inspector to fix the damage and move on. 

My opinion: you can't pursue everything under the sun on principle. Sometimes bad **** happens to good people. That's life, you suck it up and move on, especially when the "principle" ends up being largely immaterial. 

@Carlos Enriquez

You have unreasonable expectations both to imagine that a seller knows everything about his home and that an inspector will catch every thing.  If this small issue sets you off perhaps being a landlord isn't a good fit for you.

You were very fortunate that the inspector folded so easily.  He didn't owe you any money.  They are generally responsible for items that can be seen and this was covered up so not his issue.  Could he have "suspected" further damage, perhaps, but you shouldn't rely on their seeing or guessing about possible damage.

Were you there for the inspection?  Did you do a final walk through before closing?  How did you miss it?  I have been on many many inspections and I have never seen an inspector walk "all" the perimeter walls.

As to the fact that the subfloor is 2x6x20 that is no big deal you can piece the floor just as easily as plywood.

Don't whine take a deep breath and have a glass of some Sonoma County Cabernet instead.

I'm out of state so I couldn't walk the place. Hence my trust of the inspector. The house is in Seattle, and I'm in California.

Sorry, but you choose not to examine the place yourself.  Your choice.  Every property has defects.  Inspectors always miss things.  Every property you buy is going to have defects, some of which won't disclosed to you.  Its up to YOU to do your due diligence.  If you're going to buy property sight unseen this is going to be par for the course.

@Carlos Enriquez  Is this really such a major repair issue?  Just fix it and move on. 

 Based on your description, I think you have an unrealistic expectation of what he should have noticed.  Please do the right thing by returning the inspector's money to him. He did the work; he deserves to be paid.  To do otherwise would be to take advantage of his kindness.

Originally posted by @Jay Hinrichs :

@Daria B. on a simple buy of a SFR I don't think the Attorney is the key player here. Contracts are basically all boiler plate.

What is key is the inspections.  as denoted above.. And other things that may be germane to that area that a good RE agent would know to look for or ask about.

Keep in mind out here on the west coast we NEVER use attorneys for SFR purchase's , we use a good agent and a title and escrow company.. A good Agent is what you really need.

they actually get out in the field and look at your property.. attorney just sits in their office and rights a contract  LOL... not that you can't go that route..

lol my experience is most real estate agents are just out to make their commission (and I would too as that's how I get paid) & make a sale. and to not use an attorney, well, I wouldn't advise that no matter what the local customs are.

I'm sure there are some exceptions to the norm on agents but my guess would be 90% of them are just out to make the buck.

@Scott W.   I could see how you have that impression.. I have been doing business in Il last few years.. and its a very unique situation there.. were your forced to deal with an attorney.

I was trying to close a simple house transaction and was forced to hire and attorney I don't need an attorney to close my deals these are so simple.. there is no need.. but in that state title companies won't deal with you direct like we can on the west coast and other markets.

Attorney brought nothing to the party.. other than messenger services.

I've bought 2 foreclosures in Illinois and have never used an attorney; but when sold (flipped) the 1/2 homes, I did use an attorney ($350) and I'm glad I did as some things came up later he handled for me.

@Scott W. While that may be true for some agents, and I ran across one, I have an agent who has become a very good team member to me. As @Jay Hinrichs points out, every area differs so it would be a good idea to find out the area being bought in, what is the typical steps for any transaction. Here I ran across a FSBO and because I've never done a contract on my own, I looked to the attorney to "check-over" the contract. Now of course with a regular seller-agent to buyer-agent, I just make sure the contract has what I need whether it's contingencies or something else and then sign. My agent looks for things that I would not know to look for. Inspections are going to be done by the inspector so I hire them to do what they need to do and would never look to the agent or attorney to do this.

Given that in Illinois our RE contracts are pretty heavy on protecting buyers than they are protecting sellers I always advise my sellers to hire an attorney. I work with very proactive attorneys in Chicago I would be happy to refer to you if you want to private message me. 

In your situation though if the buyer hired an inspector to look at the property and no defects were discussed during attorney review that is on the buyers inspector. Which most have insurance for those instances.

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