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Real Estate Q&A

A Smart Builder Will Be Sure to Fix Minor Defects

September 20, 1998|ROBERT J. BRUSS | SPECIAL TO THE TIMES

QUESTION: My first home, a brand-new house built by a well-established local construction firm, has a series of small problems that the contractor refuses to correct.

For example, my front porch lights do not function as a "team" on motion detectors. The manufacturer tells me they should work together, but the builder can't get the wiring right. Another problem is that a small backyard hill needs to be regraded. The closing process was a nightmare, with the builder apologizing to the bank. What should I do to get these defects corrected?

ANSWER: Your situation shows why buyers of even brand-new houses should have a professional inspection before closing the purchase. Before the sale closes, the buyer has leverage over the builder. Afterward, the buyer loses that leverage.

If the total cost of correcting the problems is significant, hiring a real estate attorney is advisable. The best home builders quickly correct defects, especially when pressured by an attorney, because they know a satisfied customer is their best and cheapest advertising.

For small defects, an effective remedy is to send your builder a written list of the defects you want corrected. Set a reasonable deadline, such as 30 days. Be very pleasant. Explain in your letter that if the builder doesn't correct these defects, you will have them corrected at your expense and sue the builder in Small Claims Court. Then it will be up to the judge to decide if you are right.

Lender May Be Liable for Loss After Forgery

Q: My wife and I were divorced in 1992. She got to live in the house with our two children until the youngest became 18, which happened three years ago. Since then, my ex-wife has been stalling on selling the house.

However, unbeknownst to me, she forged my signature on loan papers and refinanced the house to the hilt. There is virtually no equity left. She claims she's broke. What should I do?

A: Consult a real estate attorney. You may have little practical recourse against your ex-wife if she's broke, but you may have recourse against the new lender and the title insurance company that insured the refinanced mortgage based on your forged signature.

Forged signatures continue to be the biggest cause of title insurance losses. The situation you describe never should have happened because signatures on a mortgage or deed of trust must be notarized to be recorded.

Some notary public obviously violated his or her duty by acknowledging your forged signature. Your ex-wife might also be criminally liable, so ask your attorney to advise on that aspect too.

Termites Bug Buyers' Contingent 'As Is' Bid

Q: We made a written offer to purchase a fixer-upper house "as is" because the listing agent said that was the only way the seller would sell. Our offer was accepted by the trustee for an estate. The terms of our offer provide for a professional inspection in addition to the customary termite inspection in our area.

There weren't any major surprises from the professional inspector. But the termite inspector said the house must be "tented" and fumigated. Also, the termite damage will cost at least $12,000 to repair. We decided to cancel.

But the seller refuses to cancel the sale and refund our $5,000 deposit. He says if we don't go through with the purchase we will be sued for any loss if another buyer pays less for the house. Can he do this to us?

A: Without reading the exact wording of the purchase contract, I can only give you general information. Just because a property sale is made "as is"--meaning the seller won't pay for any repairs--does not in and of itself give the buyer the right to cancel the purchase.

However, if your purchase offer was contingent on your approval of the termite inspection report and the professional inspection report, your disapproval entitles you to cancel the sale and get your $5,000 deposit refunded.

Having a real estate attorney write a strongly worded letter to the seller demanding cancellation of the sale and immediate refund of your deposit should get the result you want.

Seller Balks; Would-Be Buyer Needs Attorney

Q: We contracted to buy a one-of-a-kind house. But about two weeks before the scheduled closing date, the seller notified our Realtor that she had changed her mind and doesn't want to sell. She delivered a cashier's check to refund our deposit. But we really want to buy that house. We have arranged our mortgage and even hired a moving van. What can we do to make the seller honor her contract with us?

A: Hire the best real estate attorney you can find. He or she will probably recommend filing a specific performance lawsuit against the seller. In addition, a lis pendens (which means litigation is pending) should be recorded against the seller's title to effectively prevent her from refinancing or selling to another buyer.

Second Opinion Needed After a Low Appraisal

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