The sellers said they had a termite inspection a month before we moved in, and there was a sticker on the cabinet indicating it passed. We have had termite traps since we have been here, and while this is clearly old damage (we haven’t seen any active termites) this is just one of the many, many issues they had bandaged over.
We're sick over their dishonesty and flat-out lying on their seller disclosure statement. Do we have a seller disclosure case, or do we have to add this to the already large pile of cash ($10,000+) we have had to fork out due to their lies?
A: We say this every time we get a seller disclosure question: Just because you believe the sellers knew of an issue does not mean they actually did. Sam has seen plenty of situations where buyers honestly believed sellers were deceiving them, but there are very few cases where deception can be proved beyond a reasonable doubt.
What does it take to prove the sellers lied on a seller disclosure form? Here’s a situation Sam faced in his law practice: The buyers had a large plumbing problem within a month after closing. The new homeowners called a plumber to fix the problem, and fortuitously it was the same plumbing company the sellers had used when they owned the home. The very same plumber came out who had warned the sellers they had a major issue. In fact, he had advised the sellers the cheap fix they requested would result in a big, expensive problem in the near future. Because the same plumber has advised the sellers, and had all the documentation, the sellers paid up.
In a second situation, a listing broker who sold his own home represented to the buyer that there was no asbestos in the home. However, shortly after the buyers moved in, they discovered there was actually quite a bit of asbestos in the home. The listing broker tried to say he had no knowledge of asbestos and tried to defend himself by pleading ignorance. The court, however, took the view that the real estate broker had years and years of experience selling real estate and should have known better. In this situation, too, the seller had to pay up.
We know termite damage is costly, and we understand it appears the sellers papered over a known problem. But you’ll need more than just speculation to prove your case. You need to prove the sellers knew or should have known about the problem if you’re going to collect.
Did the sellers use a carpenter or tackle the renovation work themselves? Your case would benefit, for example, if you found out that the sellers had carpenters come in to hide the problem and if you were able to talk to those carpenters. You can check with local exterminators to find out if any of them ever treated the home and when. Some states keep records of the application of the chemicals used to rid a home of termites; you may discover your home is on that list. If you find anything that ties your seller to treatment for termite or wood-boring insects to the home, you may be closer to having an action against the seller.
We’re surprised it’s taken you almost a year and a half to find the damage. Usually, when sellers hide something from the buyers it shows up shortly after the sale: a leaky basement, a leaky roof or a cracked foundation. We certainly aren’t saying you don’t have a case, but it’s interesting it took you awhile to find the damage.
Finally, you should know that some states limit the time a buyer has to sue a seller for violating disclosure requirements, typically two to four years. You'll need to find out what the time limit is in your state. Given that you have $10,000 invested into solving the problem, you might want to talk to an attorney in your area who has some expertise in seller disclosure issues. Remember, you might have to decide quickly whether you're going to file a case so the clock doesn't run out on you.
Good luck. And, we hope you don't find any other problems.
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them through her website, ThinkGlink.com.