Buyer threatening to sue us after closing.

General Real Estate Investing
1

My husband and I received a letter in the mail from the buyer of our old home. She said the letter serves as “notice and demand” that we fix the drain in the garage or else she will take legal action which includes my wife and I paying all of her legal and court costs if she wins. She stated that we failed to mention a material defect in the drain in the garage on our disclosure statement. A material defect is something that can cause a health or safety issue and substantially reduce the value of the home. The drain overflows whenever the washer purges the water. It had been that way since my husband and I bought the home nearly 4 years ago, and we never thought of it as a problem. The water comes up above the drain lid and makes a shallow (less than 1" deep puddle) in a 4 foot by 6 foot size area around the drain. Then within 30 second or so, the water runs back down the drain. Within an hour the concrete floor is dry again. I even stuck a hose down the drain at full force one time and it was able to drain fine. There are no roots in the sewer system since we were able to flush the toilet and drain the bathtub at the same time with no trouble. I think the drain works the way it does by design and is not plugged. My husband and I do not feel it is a material defect. The buyer cited the possibility of future potential mold and noxious substances due to the drain which will aggrevate her current health situation. My husband and I think that is utter nonsense. Never has mold or noxious substances formed in the nearly four years we lived there due to the water overflow in the garage. I feel that if this was a problem it would have been detected in an inspection, which she chose not to have. Also, the lady never even looked at the home til 3 days before closing. Do you think this lady really has a case? She says my husband and I need to fix it in a timely manner or she will pursue legal action.

R2R

2

jennyb,

Glad to meet you.

I find that the majority of people who are serious about suing you have their attorney send you a letter. Then you respond with an answer from your attorney. Until this point it is just finger pointing.

The cost of suing is quite considerable, which anyone who has gone through any litigation will attest to. So suing you because a drain does not work according to her standards, will most likely go down the drain along with the letter you received from her.

Personally I think this lady is a “NUT” and is trying to find out if you are squirrelly enough to take a bite.

John $Cash$ Locke

3

John,

Thanks for the reply. Im 25 and this was my husband and I’s first home so we have really been worrying about this and are trying to make the right decision. If the drain would need a roto rooter…would this be considered maintenance or a material defect? I have heard where people do a yearly maintenance schedule to clean out their garage drains. We really thought that this was just a natural occurence of the drain since it was like this since we had bought the home.

thanks again,

jennyb

4

jennyb,

I understand what you are saying and you seem like the type of person who cares.

However, personally I would not do anything at this time, by this I mean would you admit your were aware of an existing problem and did not disclose it, then thinking about it you are not a plumber so the explaination you gave above was what you truly believed.

This looks more like a maintenance issue, but if you cave in then no telling when it will end, do not take a weak postition on this. Next it could be the electrical socket in the bedroom only measures 109 volts instead of 110.

I would never advise anyone if I felt it would put them in harms way, but in my experience, having had sellers tell me all kinds of stories after they did something that caused the problem and the majority of them went away after time, I always showed empathy and not sympathy.

This is one of my favorites, in Nevada you need to water the lawn ever day during the summer. I sold a house to a couple from back east, after about two months I get a call from the wife, she exlained I needed to replace their lawn because it was dead and some how I was responsible for this.

So I drive over to the property out of curiosity more than anything else, sure enough the lawn was dead as a door nail. So I start my inspection to see what is wrong, the majority of houses in Nevada have sprikler systems with timers, so you water heavy in the am and pm during the summer months. I check their timers first thing and see it is set to once a week for 15 minutes. I ask the wife did they reset the timers, she said “my goodness yes, our first water bill was outrageous.”

I don’t think I need to finish this story, but when you get a few hundred deals under your belt, nothing will surprise you when it comes to buyers.

You did what you believed was right, let her call roto rooter which she has probably already done if she was that concerned about the drain.

Rent a movie and relax, today I rented Scary Movie 3, I certainly hope it does not have any violence or foul language in it, as my buyers do enough of that to me already.

John $Cash$ Locke

5

Thanks a lot john for your help. We have decided to just let it go and if she takes legal action then that will be our next step. Renting a movie this evening is definitely good advice that I will take you up on.

Thanks again,

jennyb

6

We have not contacted the buyer since we have received the letter. Should we not say anything and just let it run its course or should we reply to tell her what our reasoning is.

Thanks again,

Jennyb

7

jennyb,

If you respond and give reasons this could go against you later on if you say the wrong thing, however innocent it may be.

Play your cards close to your vest at this time and let no one know what you are thinking. Nothing official has happened so no reply is neccessary.

Rent a movie tonight and “fuhgiddabouddit”, this is Godfather I talk but good advice, also I am waiting for Heather to teach me Texan as I wonder how they would say “you may be making a mountain out of a mole hill.”

Besides fishing I am a movie watching degenerate.

John $Cash$ Locke

8

John has given you sound advice. These people are not rational and the defect in question does not strike me as material. Even if you get a letter from an attorney, don’t panic. Attorneys bluster, posture & threaten all the time. Oftentimes, if your attorney sends a calm letter to them stating that they have no legitimate claim, they simply disappear. At this stage, she’s just blustering. Don’t lose any sleep over it. This sort of thing happens all of the time because there are a large number of fools in the world who like to make everyone else miserable.

John Hyre, Attorney

9

Jenni,

First of all where are you located ? And did you sell outright or on CFD ? CFD in Texas now is horrendous. My parents got sued on one they sold CFD, for some crazy reasons like this and ended up settling for 7.5K Could have been worse I guess, as they could have been sued for 3x whaterever had been ever paid on the house. I am not a lawyer and cannot give any legal advice, just wondering if it was sold CFD ? I wouldn’t spend too much time worrying either way though unless they hired a lawyer, then I would get my own the next day. And I’m only a little over a year into this crazy but fun REI business so … the “Take it with a grain of salt” applies.

John, Texan speaking would be “Don’t worry bout it til you got the lawman a-knockin on ya door!” =) Boy would I get teased if I really talked this way heheheh

10

Thanks John for the sound advice. Heather, we are located in Decatur, IL. Also, we sold it outright through a real estate agent. Thanks again,

Jennyb

11

Jennyb:
When did you sell the house to them? According to the IL Disclosure form:
(765 ILCS 77/60) Sec. 60. No action for violation of this Act may be commenced later than one year from the earlier of the date of possession, date of occupancy, or date of recording of an instrument of conveyance of the residential real property. (Source: P.A. 88-111.)
If it was more than a year ago, they can’t claim anything anyway.

Also, from the last paragraph in that form:
…THIS DISCLOSURE IS NOT A SUBSTITUTE FOR ANY INSPECTIONS OR WARRANTIES THATTHE PROSPECTIVE BUYER OR SELLER MAY WISH TO OBTAIN OR NEGOTIATE. THE FACT THAT THE SELLER IS NOT AWARE OF A PARTICULAR CONDITION OR PROBLEM IS NO GUARANTEE THAT IT DOES NOT EXIST. [my emphasis added] THE PROSPECTIVE BUYER IS AWARE THAT HE MAY REQUEST AN INSPECTION OF THE PREMISES PERFORMED BY A QUALIFIED PROFESSIONAL.
And you say the buyer declined to have an inspection done…doesn’t seem like they really have a leg to stand on, even if there WAS a problem.
Enjoy the movie… :slight_smile:
Andy

12

andy,

we sold the home on april 14, 2004.

Thanks for the reply.

jennyb

13

Hi all. I have an update.

Last May the buyer contacted us and wanted us to pay for the repair. We told her to call a local roto rooter place. Well anyway, we never heard anything from her til last week. We received a letter in the mail demanding that we have to pay $1700 ($324 from having the main line and second line (garage drain) cleaned last June. Then the remaining balance is from when she got a quote for replacing the garage drain (Quote was from August 2004). She claimed that the company was not able to open the drain at all.

She did not include the Quote or the Invoices to this letter she sent. So we do not even know if she even actually did these things. Actually, she mailed the letter to her realtor and then her realtor mailed it to us. Are we at fault? Are we legally obligated? It has been over a year since we have sold the house. I keep telling my husband that we should contact an attorney to be on the safe side but he insists to just let it go. What should we do?

I do not understand that if she got a quote last August why she waited so long to forward this quote to us. I figured if she was that concerned we would have heard from her a few days after our last response to the realtor.

Jennyb

14

Although I can’t give legal advice, I can say that you mentioned that she waved her opp. to have an inspection done, which I’m sure was in the contract. In that, the home was purchased “as is”. She cannot bother you on that. The usual reading goes something like,
buyer shall/shall not exercise their right to have an inspecton done. In the event the buyer is dissatisfied with the inspection, buyer has___ days to inform the seller. Then at that point, you would have_X_ amount of days to make the repair. Ask the law, but that’s about how it goes. Hope that helps.

"Take no thought for tomorrow; it has enough worries of it’s own.

BiggBird

15

Yes, she waived the inspection. She only had a termite inspection done on the home. Also, she never saw the home til the day before closing when they did the walkthrough. I keep reading the IL Disclosure form:
(765 ILCS 77/60) Sec. 60. Since it does state that she cant do anything after a year. I guess I shouldn’t worry so much about it.

jennyb

16

In my oppion I would post this in the legal section and see what they say.

I take all threats seriously, I would also talk with an attorney,

I don’t like to give any one legal advise because I am not an attorney and this needs to be presented to an attorney.

17

We have left messages for a few different attorneys and no phone calls back. We are hoping that we will be hearing something very soon. We want to do the right thing. We figured that an attorney knows the laws and they will point us in the right direction. Thank you.

jennyb

18

I contacted an attorney. He said the the statute of limitaions on the Illinois Disclosure Act is one year from closing (just as I read in the act). He said her time is up. He told me to tell her “no I will not pay to replace her drain system” or not respond. All she can do now is sue for fraud but she would have to prove I was aware of a material defect (which I was not) and she would not be able to sue me for her attorney fees, since that only applies to the disclosure act which it is too late for her to get me for that.

jennyb

19

I know in california that even if you sell a house in as-is condition you are required to disclose any known issue’s. Seems kind of hard to enforce since all someone has to do is act dumb like they never new. Looks like your okay since the statue of limitations is only a year. Just thought I would throw my 2 cents in. ;D

20

I can appreciate the fact you have a hard time blowing things off as I have the same problem. However, he some thoughts

1)While laws and legal practice varies from state to state, I think it safe to say that most courts are not going to be interested in hearing about a buyer who did not do an inspection prior to the sale.

  1. I would not respond unless you get a letter form a lawyer. Otherwise, any response will just further motiavte her to pursue you. Also, lawyers are not going to be interested in working on a case over a couple of hundred dollars. Also from people I know who have pursued this kind of thing, lawyers want a $5k or$10k (or more) retainer to get started. This lady might be crazy, but she would have to be insane to front $5k to go after a $1700 judgement (at best)

  2. I think every one knows that drains plug up whenever they feel like it; they work well one day and clogged the next. Hard to prove it was “defect” and she waited quite ahile to pursue her claim.

In short, there are many things about this situation that are in your favor (beside the fact you did not do anything wrong!).

Just collect the letters and throw them in a file and foreegt about it. Enjoy your new home.