Author Topic: Realtor description boasted 20 yr warranty on basement waterproofing but...  (Read 5393 times)

Pell mell

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Now that we've bought the house ($500,000, high COL Canadian city) but don't close until next month, our real estate agent called to say that when the house owner "did a little research" they've "now" discovered that the company is no longer in business.

I did a little research and the waterproofer is now in business under a very similar name with just the difference of "Drainage" and "Waterproofing".  When I looked up his company on BBB, his company had received an 'F'.

We clearly were stupid and did not do due diligence.  Face punch. Face punch. Face punch.  We were completely clueless about houses and shouldn't have been idiots. We are in a city where they have a short time between the open house and when they accept offers. We went to the open house Sunday, saw it with our agent Monday night, and had a house inspection Tuesday and they started accepting offers the same night,  1 1/2 hours later.  It's a high, high pressure situation and people lose out on houses they want all the time. 

So...does anyone know if this is grounds to get out of the deal?

[Irrelevant I guess, but kind of disturbing:  When I looked up the company owner's name, I learned he has a rep. for a bad temper.  For eg, as an asst kids hockey coach, he's threatened an official at a game ("I'll see you in the parking lot") and received 15 major penalties for similar things.]

AlanStache

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I might get the work inspected by an external party, find the best BBB or Annies list guy to come out and inspect.   Work might be fine.   If not you have stronger case to exit.

Pell mell

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Yeah, that would be ironic if it were done well.  I might call the lawyer to get his take on it.

TrMama

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Yes, call your lawyer.

Otherwise, if you haven't yet removed your "subject to's", then do your level best to not remove them. Usually, this entails doing nothing at all.

If you have removed your subject to's the only way I know of is to show up to closing with no money. You'll piss off everyone involved and will lose your deposit, but it can work (again, check with your lawyer before doing this).

Milspecstache

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What about the actual waterproofing job:
Do you think groundwater is up against the basement? (based on terrain, neighbors, etc)
Do you have sump pumps?
Is there a french drain coming off the foundation?
What is the basement like? (moldy, wet, water)
Is the basement finished?

Waterproofing is inspected in most localities.  Before I gave up on a house I wanted I think I try to talk to the inspector or maybe even the home builder (company).  Perhaps the company would honor the warranty.  Or the inspector may be confident that a good job was done.

Pell mell

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What about the actual waterproofing job:
Do you think groundwater is up against the basement? (based on terrain, neighbors, etc)
Do you have sump pumps?
Is there a french drain coming off the foundation?
What is the basement like? (moldy, wet, water)
Is the basement finished?

Waterproofing is inspected in most localities.  Before I gave up on a house I wanted I think I try to talk to the inspector or maybe even the home builder (company).  Perhaps the company would honor the warranty.  Or the inspector may be confident that a good job was done.

I'm embarrassed to admit that I don't know if there is any groundwater up against the basement.. I'll have to google 'French drain'.  No sump pumps. The inspector thought it would be a good idea to do a bit of grading. The basement in the area of the waterproofing does not appear to have moisture, according to the inspector. (8-14% moisture overall). It is a small addition that was waterproofed.

There is more moisture on the other side of the basement. It's mostly in the (uninsulated) cold room under the porch--about 22-25% moisture. And some mould in there.  And some moisture in the little furnace room. The inspector thought that that particular problem would most likely be corrected with re-sloping of the eaves troughs and moving the downspouts.

Pell mell

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Ironically, just as I was writing this, our very experienced real estate agent called. She said that the sellers had included this warranty description in good faith in the listing. And that only in the process of trying to provide the invoice and warranty for us, did they then discover that the company had gone under.

I said, "So I guess we should have asked for it upfront and seen for ourselves that they were bankrupt before buying?"

She paused a long beat, "Possibly."

Argh. Lessons.

Mori

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Ironically, just as I was writing this, our very experienced real estate agent called. She said that the sellers had included this warranty description in good faith in the listing. And that only in the process of trying to provide the invoice and warranty for us, did they then discover that the company had gone under.



What are the penalties involved in cancelling your contract? Contingencies? I'm in the US so I don't know a lot about Canadian real-estate deals. Is it worth losing X dollars to not have to buy a XXX dollar problem/fix?

Pell mell

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What are the penalties involved in cancelling your contract? Contingencies? I'm in the US so I don't know a lot about Canadian real-estate deals. Is it worth losing X dollars to not have to buy a XXX dollar problem/fix?

Apparently we can't get out of the deal even though I would love to.  Our real estate agent said we had to take out every clause or there'd be no way we would get it over the other multiple offers.  In fact, we set a price in our head and would not go over it.  Our agent said we wouldn't get it with that price but we wouldn't raise it.

The lawyer said he would try to get something for us.  He said of course it would have been better for us if the guarantee were in the agreement to purchase. But he said it was included in the listing so he was now "researching it". >I'm hoping this isn't lawyer-speak for there's no chance in hell, but I'm dragging this out to shake some more cash out of you. :(

I guess i have no choice but to trust him.  He also said he'd try to get something for an improper description of a mutual drive. I guess we'll see...
« Last Edit: February 28, 2014, 07:27:14 PM by Pell mell »

AlanStache

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And you are sure the work is bad and not just unwarrantied by a contractor that might have done bad work?  I agree it sounds best to get out if you can.  But if it costs you more to get out than to redo the work on a house you otherwise want you might have to go for the least-shitty-option.

arebelspy

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Re: Realtor description boasted 20 yr warranty on basement waterproofing but...
« Reply #10 on: February 28, 2014, 04:58:32 PM »
Ironically, just as I was writing this, our very experienced real estate agent called. She said that the sellers had included this warranty description in good faith in the listing. And that only in the process of trying to provide the invoice and warranty for us, did they then discover that the company had gone under.

Yeah, that shouldn't be relevant.  If they said there was no mold (in good faith), and then you discovered mold in the due diligence phase, you could certainly take issue.

Did your contract have no due diligence/inspection period?

Post a copy of it with the personal information redacted if you'd like so we can read it.

Hope this isn't too expensive of a lesson.  Next time don't listen to a Realtor trying to get you to bid up and remove important clauses.

Also, you can just refuse to release the EMD to them and refuse to close.  Cancel the contract in writing requesting a full EMD refund.  The title company can't disburse the EMD to you or to them without both parties agreeing.

The thing is, they're on the clock, most likely.  They want to sell their house.  They can't sell it while you have it under contract.  So you can sit there, refusing to let them have the EMD.  For a few months, if necessary.  Likely they'll eventually release the EMD so they can get it under contract to another buyer, and not bother with the hassle of letting the courts figure it out.  At worst, if you lose, you're out the EMD you would be out anyways.
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Pell mell

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Re: Realtor description boasted 20 yr warranty on basement waterproofing but...
« Reply #11 on: February 28, 2014, 07:24:56 PM »
And you are sure the work is bad and not just unwarrantied by a contractor that might have done bad work?  I agree it sounds best to get out if you can.  But if it costs you more to get out than to redo the work on a house you otherwise want you might have to go for the least-shitty-option.

I'm not sure if the work is bad. It might be good for all I know. But I don't know that we have time to arrange an inspection of it before the lawyer has to file some paperwork.

We're allowed one more visit before possession.  I hear it's best to do it as close to possession as possible to ensure everything works, so I'm not sure if the inspection would come too late for the paperwork.  And if we use up our visit too early before possession, we won't know that everything is in working order and decent shape. We only have one hour to do the visit.

Pell mell

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Re: Realtor description boasted 20 yr warranty on basement waterproofing but...
« Reply #12 on: February 28, 2014, 07:31:04 PM »
Ironically, just as I was writing this, our very experienced real estate agent called. She said that the sellers had included this warranty description in good faith in the listing. And that only in the process of trying to provide the invoice and warranty for us, did they then discover that the company had gone under.

Yeah, that shouldn't be relevant.  If they said there was no mold (in good faith), and then you discovered mold in the due diligence phase, you could certainly take issue.

Did your contract have no due diligence/inspection period?

Post a copy of it with the personal information redacted if you'd like so we can read it.

Hope this isn't too expensive of a lesson.  Next time don't listen to a Realtor trying to get you to bid up and remove important clauses.

Also, you can just refuse to release the EMD to them and refuse to close.  Cancel the contract in writing requesting a full EMD refund.  The title company can't disburse the EMD to you or to them without both parties agreeing.

The thing is, they're on the clock, most likely.  They want to sell their house.  They can't sell it while you have it under contract.  So you can sit there, refusing to let them have the EMD.  For a few months, if necessary.  Likely they'll eventually release the EMD so they can get it under contract to another buyer, and not bother with the hassle of letting the courts figure it out.  At worst, if you lose, you're out the EMD you would be out anyways.

Unfortunately, we waived the inspection period as per the advice of our real estate agent because the sellers had had an inspection done and we had an inspection done before the sellers started hearing the offers. (The sellers hear the offers all on one night and you have to wait around while everyone presents theirs).

Also, we had our mortgage pre-approved, and any conditions related to that waived as well. Basically we had everything waived, as per her advice. Which I guess is pretty common here.

Our agent was pretty cavalier about everything though. The attic is sealed? 'No problem. Lots of attics are sealed. That's very common.' I think I'm more worried about the attic now, after doing research.

It has been a lesson all around.

Pell mell

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Re: Realtor description boasted 20 yr warranty on basement waterproofing but...
« Reply #13 on: February 28, 2014, 07:37:01 PM »


Also, you can just refuse to release the EMD to them and refuse to close.  Cancel the contract in writing requesting a full EMD refund.  The title company can't disburse the EMD to you or to them without both parties agreeing.

The thing is, they're on the clock, most likely.  They want to sell their house.  They can't sell it while you have it under contract.  So you can sit there, refusing to let them have the EMD.  For a few months, if necessary.  Likely they'll eventually release the EMD so they can get it under contract to another buyer, and not bother with the hassle of letting the courts figure it out.  At worst, if you lose, you're out the EMD you would be out anyways.

I don't think it works like that here. When I talked to the lawyer I asked if we could get out of it and he said no. But I can always ask about this route when I talk to him next. Thanks.

Mori

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Also, you can just refuse to release the EMD to them and refuse to close.  Cancel the contract in writing requesting a full EMD refund.  The title company can't disburse the EMD to you or to them without both parties agreeing.

The thing is, they're on the clock, most likely.  They want to sell their house.  They can't sell it while you have it under contract.  So you can sit there, refusing to let them have the EMD.  For a few months, if necessary.  Likely they'll eventually release the EMD so they can get it under contract to another buyer, and not bother with the hassle of letting the courts figure it out.  At worst, if you lose, you're out the EMD you would be out anyways.

I don't think it works like that here. When I talked to the lawyer I asked if we could get out of it and he said no. But I can always ask about this route when I talk to him next. Thanks.

Per this (http://www.justanswer.com/canada-law/6uhq4-back-real-estate-deal-closing-lost.html) it looks like it's the same as in the US: they can sue you to perform (that is, honor the contract) but it's a matter of how much time/energy/money they want to waste going after you. And, they have to have the time/money/energy.

Have you made any signals to their realtor that you want to back out of this deal? They might be able to grab one of those other offers that were on the table without any real issue at this point.

Pell mell

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Thanks a lot for looking that up. I appreciate it. I had indicated we would like out, but real estate agent said it wasn't possible. Next time ask lawyer first, I guess, and as quickly as possible. At this point, my partner is stressed and would just like to go through with the deal. He's committed to it now. So that's fine. We'll analyze what we need to do and do our best.

The real estate agent has been a real piece of work. I'd love advice about her, so I might start another thread about that. She has me shaking my head about her general competence... And her fee.

arebelspy

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Thanks a lot for looking that up. I appreciate it. I had indicated we would like out, but real estate agent said it wasn't possible. Next time ask lawyer first, I guess, and as quickly as possible. At this point, my partner is stressed and would just like to go through with the deal. He's committed to it now. So that's fine. We'll analyze what we need to do and do our best.

The real estate agent has been a real piece of work. I'd love advice about her, so I might start another thread about that. She has me shaking my head about her general competence... And her fee.

If you throw up a stink in life, you can get pretty much whatever you want.  I don't recommend doing it often, but when you feel you've been wronged, sometimes it's the best way to deal with the situation - stand up for yourself.  It's never too late to do that.

Ah well.  Best of luck.  :)

IMO, a warranty on that probably won't be used anyways, so it's a super minor thing.  If you like the property, I wouldn't have that dissuade me, personally (unless there was something in the inspection indicating a problem, and then I'd have it fixed before purchase, not after, trying to chase some warranty).  Often builder's warranties only cover the original owner, so while this is slightly different, there's lots of times they're irrelevant anyways.   Best just be happy with the purchase, as you were all along.

(But do keep in mind - no one can force you to do anything, ever, really.)
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Mori

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Thanks a lot for looking that up. I appreciate it. I had indicated we would like out, but real estate agent said it wasn't possible. Next time ask lawyer first, I guess, and as quickly as possible. At this point, my partner is stressed and would just like to go through with the deal. He's committed to it now. So that's fine. We'll analyze what we need to do and do our best.

The real estate agent has been a real piece of work. I'd love advice about her, so I might start another thread about that. She has me shaking my head about her general competence... And her fee.

Which real estate agent? Yours? Kind of a conflict of interest there (they get paid if you buy, so obviously they want you to buy). Theirs? Ok, fine.

If you are happy I'm happy for you. Just, as one with house regrets, I don't want you to talk yourself into something as pricey as a house purchase. There are reasons to hesitate. If the inspection looked good and your inspector didn't really have any issues, then a warranty probably isn't a big deal. Nothing is guaranteed--instead of being out of business now, the contractor could have gone out of business the month after you'd purchased the house. If you like the house, it's a minor point.

...though I would not store any water-permeable valuables in that addition for a bit. :)

Good luck!

Pell mell

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Thanks a lot.