Question (IL): I live in Illinois and I recently purchased a home. I declined a formal inspection because I had someone qualified to inspect it for me. I closed on the property less than two weeks ago and purchased it "as is."
The property was just recently hooked back up to city water. The sellers used city water for a while but supposedly had a dispute with the water company so they went back to using the well. The sellers had not lived in the house for quite some time but came back frequently, I'm assuming to check the property and so on. On one occasion they came back, according to their Realtor, to have the water turned back on so they could check for leaks. They only had the water turned on long enough to check and I was told there was a pipe under the sink that was dripping but the problem was fixed.
Now I'm here and I was the one that had the water turned on. Lo and behold, both bathrooms have leaking pipes and one of them to the extent that it can't be used. It is very obvious.
I know I should have not trusted the Realtor, but I did in good faith. Do I have any recourse? I should add that every time we visited the house with the Realtor, it also had a strong smell of propane. He told us the tank was low and he would get someone on it. Well, come to find out, it was a propane leak. It was leaking somewhere between the tank and the house. We had to completely shut the gas off to the whole house until we can get that resolved. Your advice would be greatly appreciated.
Answer: First of all, we are extremely sorry that you are experiencing these problems. However, they are probably brought on by your own actions. If we are correct, we believe that the Realtor who showed you the property was the Listing Realtor who represented the seller, but did not represent you. Buyer's who do not use a Realtor to represent their interests are begging for the kinds of problems you are having. To compound your problems, you did not hire an Illinois-Licensed inspector. Had the "formal inspection" that you declined actually been done, the inspector most likely would have called out the leaks in both bathrooms and the propane leak in the line between the tank and the house.
The final mistake you made was to purchase the property "as is." That usually means -- provided the seller and the Realtor who represented the seller did not misrepresent or conceal any material facts -- that you contractually agreed to purchase the property in whatever condition it was in.
As to whether you have any "recourse," we suggest that you hire an Illinois Attorney experienced in such matters, to review your real estate documents and advise you as to the merits of your case, if any.
Question (MS): I have an investment in Biloxi, MS. It is a duplex. What would you recommend to me in order to convert it into 2 separate condominiums?
Answer: The conversion of a duplex into condominiums can have many benefits. It creates an obligatory shared maintenance, a lien right to collect fees, an ability to sell one for more money than the duplex would sell for, and a mechanism for a third party to manage the duplex and the other party has to share the expenses. You also own your own unit, and don't have to collect rent on the other. However, because the condo laws vary greatly from state to state, we urge you to hire competent, experienced legal help.
We recommend that you hire a Mississippi Attorney who is experienced in condominium laws and condo conversions. A Google search of "Mississippi+Condominium Conversion Requirements" (without the quotes) should provide a return of law firms and/or attorneys who meet your search criteria.
Question (NC): I signed a purchase agreement with a developer/builder of a newly developed community. When I signed the contract I qualified for the loan. However, because the Certificate of Occupancy on the building was given later than expected, I no longer qualify to purchase the property.
Can the developer sue me? Does he have a case if I'd said that I would sign a contract release and the developer/builder can keep the $10,000 earnest money?
Answer: The answers to your questions lie within the contract that you signed with the developer/builder. Some North Carolina builders use the standard Realtor purchase agreement, but most do not. You, as a residential buyer, would be well-advised -- if you do not have a Realtor representing your interests, to hire a North Carolina Attorney to represent your interests even though it appears you are already in a builder contract.
The first thing you should recognize is that this contract is skewed toward the builder and it protects the builder's interests. It is very likely that the delay in issuing the Certificate of Occupancy will have no effect on your contractual obligations to close. When a buyer no longer qualifies to obtain a loan, and the developer/builder offers a contract release in exchange for the $10,000 earnest money, it is very likely that the developer/builder will have waived all of its rights to sue the buyer for other remedies at law such as specific performance.
However, we urge you to hire an attorney who has successfully dealt with builder contracts to review the release form and possibly to even counsel you on the entire real estate transaction.
Question (NY): My bank is also my mortgage lender. The bank has contacted me to say my last refinance in 1995 on my private home in NYC was never recorded and would I now please return to their attorney to re-sign all documents and notarize others I signed in 1995.
I have been advised by others in circumstances like this I may now be able to renegotiate my mortgage with more favorable terms. The bank is pretty persistent in wanting me to see their attorney ASAP, but I'll refrain until I know what suits me best.
I would appreciate any advice you may have.
Answer: More than likely, you signed a document at the closing that said if there was a mistake, omission, or clerical error in the documents you would re-execute the documents to correct them.
Notwithstanding this issue, though, is that you borrowed the money under specific terms and conditions, you received the benefit of the loan, you made payments, and then subsequently (years later) your bank discovered there was a clerical error in the initial documents. You still owe the money on the same terms you agreed to. Trying to play "gotcha" under these circumstances is not a good idea.
