I just recently bought a house only to find out I have $16,000 worth of hail damage on my roof. Apparently, there was a big hail storm on the weekend between inspection and closing. I was moving from out of state and had no idea until almost a month later when I noticed every house in the neighborhood getting their roofs replaced.
Who should be responsible for the damage and insurance deductible in this case? Me or previous owner?
You’re in an awkward position. Your insurance company won’t cover the hail damage as your policy was not in place until you purchased the home. Your seller’s insurance company should cover the hail damage as that insurance policy was in place at the time of the hail storm.
Your seller should have had insurance in place to cover this peril, and we’d like to think he or she would be willing to cooperate with you and file a claim with his or her insurance company to get the damage repaired.
Having said that, you also asked about who should be responsible for paying the deductible. We think the bigger issue is to make sure the bulk of the roof replacement expense is paid by the seller’s insurance company and get that issue taken care of first. When it comes to the deductible, we’d hope the seller would be willing to pay but may not have the legal obligation to do so. You’d have to review your contract terms to determine what obligations the seller has to you on this issue.
Most residential contracts will provide that a buyer has the right to terminate the contract if there is damage to the property between the contract date and the settlement date. The buyer may also insist that the seller reduce the purchase price of the property by the amount of damage to the property before closing. In states where attorneys represent purchasers, the attorney will usually ask the buyer before the start of the settlement closing if everything at the home was in proper shape.
We don’t know whether you performed a pre-closing walk-through of the home and, if you did, whether you would have noticed the damage on the roof. If the damage was noticeable and you didn’t perform the inspection before closing, that was unfortunate for you.
Now that you’ve closed, it’s possible that your state laws or court cases say that you take the home in the condition it was in subject to any violation of representations by your seller.
The flip side is that seller disclosure laws in your state may have obligated your seller to disclose the hail damage to you before closing. Over the last 15 years or so, most states have enacted seller disclosure laws. These laws require sellers to disclose to buyers known defects and problems in homes. Frequently, states have approved forms for use by sellers with check off boxes of major matters that must be disclosed to buyers.
You may have received this seller disclosure document around the time you signed the purchase and sale agreement for the home. While at that time your home didn’t have hail damage, it did at the time of settlement. If your seller was living in the home and knew of the damage, he might have had an obligation to disclose that damage to you. If the seller had that obligation, then the seller might have some responsibility to pay for the repairs to the roof.
In some situations, if a seller finds out about a problem and updates a seller disclosure, the buyer has the absolute right to terminate the purchase and sale agreement without penalty.
You might need to seek the advice of a good real estate attorney or litigator near you if your seller is unwilling to file a claim with his insurance company and cooperate with you in fixing the roof. While we can’t say for sure, if the seller had an obligation to disclose the hail damage and didn’t, the seller could be in for a rough ride if you sue and win.
If the seller had moved from the home and didn’t know of the hail damage, the seller wouldn’t have an obligation to disclose the issue to you. Sellers are only obligated to disclose matters known to them. You can’t expect a seller to make a disclosure to a buyer of something that is uncovered after the closing.
Ilyce R. Glink’s latest book is “Buy, Close, Move In!” If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11 a.m. to 1 p.m. EST. Contact Ilyce through her Web site, www.thinkglink.com.