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lbelle821
Arghhhhh
Member since 2/06 5285 total posts
Name:
Lisa
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Legal/RE Advice - Help.
I'm having such a bad week as far as our house is concerned. We bought our house almost 2 years ago. The seller bought the house a few months prior, renovated the whole thing and flipped it to us. I was told at that point that there was no seller's disclosure required because it was investment property (not sure if that is try or not). So, we've been finding out all of these things about our house over the last 2 years. For example, water in the basement is a huge issue. The seller's covered it up by painting the basement so that the inspector couldn't make a determination. So, back in August my husband and I spent $7,000 to get that fixed so that it stays dry. Then last week I went to refinance our HELOC and the bank came back and told us we were in a flood zone. I was in utter shock because I would have thought this would have came up when we initially bought the house with our primary lender. Fast forward to this week and it turns out that the company that the title company used to do the flood search made a mistake (I have a letter from them admitting it). But, now I am being required by the lender to get flood insurance. To the tune of $1,700 per year!!!! I'm so sick over this and the kicker is that had I known from the beginning that this was a flood zone I have to think this would have seriosuly influenced our decision to not buy the house, especially after knowing how much extra the insurance is. Plus, now I feel like we are going to have an extra hard time selling it because we will have to disclose to the next buyer when we sell. I just can't see how this is fair and it seems like we have absolutely no recourse. The title company indicated to me that flood determination is not in the title insurance policy and they just ran it as a courtesy to the lender. Spoke to the lawyer and they aren't helpful. I just feel so awful about this whole thing. Any advice or do I just suck it up? TIA.
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Posted 11/17/06 10:04 AM  |
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Prudential Douglas Elliman Real Estate
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: Legal/RE Advice - Help.
that is such an awful story!
I am shocked that they got the flood zone wrong. are you being required by the original lender to get flood insurance, or just your HELOC lender??
I dont know what legal ramifications your have to the title company, becuase it was their responsibility to get it right. that may be your best shot - maybe they can pay for your flood insurance for a year?
The sellers are scum - but i dont think that you can do anything to them.
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| Posted 11/17/06 10:08 AM |
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lbelle821
Arghhhhh
Member since 2/06 5285 total posts
Name:
Lisa
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Re: Legal/RE Advice - Help.
unfortunately, the HELOC lender notified the primary lender (nice of them, huh?). I have to do home and pull all of the closing documents and read the title policy really close to see what it says about flood zones.
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| Posted 11/17/06 10:10 AM |
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DRMom
Two in Blue
Member since 5/05 20223 total posts
Name:
Melissa
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Re: Legal/RE Advice - Help.
Posted by lbelle821
I'm having such a bad week as far as our house is concerned. We bought our house almost 2 years ago. The seller bought the house a few months prior, renovated the whole thing and flipped it to us. I was told at that point that there was no seller's disclosure required because it was investment property (not sure if that is try or not). So, we've been finding out all of these things about our house over the last 2 years. For example, water in the basement is a huge issue. The seller's covered it up by painting the basement so that the inspector couldn't make a determination. So, back in August my husband and I spent $7,000 to get that fixed so that it stays dry. Then last week I went to refinance our HELOC and the bank came back and told us we were in a flood zone. I was in utter shock because I would have thought this would have came up when we initially bought the house with our primary lender. Fast forward to this week and it turns out that the company that the title company used to do the flood search made a mistake (I have a letter from them admitting it). But, now I am being required by the lender to get flood insurance. To the tune of $1,700 per year!!!! I'm so sick over this and the kicker is that had I known from the beginning that this was a flood zone I have to think this would have seriosuly influenced our decision to not buy the house, especially after knowing how much extra the insurance is. Plus, now I feel like we are going to have an extra hard time selling it because we will have to disclose to the next buyer when we sell. I just can't see how this is fair and it seems like we have absolutely no recourse. The title company indicated to me that flood determination is not in the title insurance policy and they just ran it as a courtesy to the lender. Spoke to the lawyer and they aren't helpful. I just feel so awful about this whole thing. Any advice or do I just suck it up? TIA.
I am pretty sure the sellers disc. is required on all deals no matter what the property type. That could be an issue you can bring up with the bar for your first attorney. You can call teh Suffok or nassau Cty Bar. Second I am sure that you have some recourse with the title co. That is their responsibility. I would call teh underwriter first then get yourself a lawyer. I think you have quite a few issues that could be addressed through legal venues. GL!
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| Posted 11/17/06 1:18 PM |
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alnem
This is gonna be a good year!
Member since 2/06 9562 total posts
Name:
Emily
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Re: Legal/RE Advice - Help.
firstly, a property condition disclosure is required for all home sales, regardless of flip or not! the only way they wouldnt have had one is if they signed off another form and gave you $500 credit at closing. did they do that?
second, did the homeowners use a realtor? even though you bought the house 2 years ago, you can sue them for up to 6 years after closing for misleading you and especially for not requiring a property condition statement.
so sorry this is happening to you. if they did use a realtor in the transaction, then contact the dept of state to see what kind of action you can take against the realtor and the prior homeowner.
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| Posted 11/17/06 1:24 PM |
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lbelle821
Arghhhhh
Member since 2/06 5285 total posts
Name:
Lisa
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Re: Legal/RE Advice - Help.
Thanks for the input ladies and I'm going to look into those things. A few more facts I should mention because I'm not sure if it matters. First, I live in New Jersey so I"m not sure if the laws are different. Also, yes, they did use a realtor and I could go that route. However, one thing I'm concerned about is that my realtor is a friend of mine (who doesn't practice anymore) but I want to be sure that they don't go after her. I think my first step is to read the title insurance policy carefully and then consult a lawyer about it. Any more suggestions are certainly appreciated. Like I said, it just doesn't seem fair and I really just feel like my hands are completly tied. Thanks again.
ETA - no, there was no $500 closing credit.
Message edited 11/17/2006 1:32:50 PM.
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| Posted 11/17/06 1:31 PM |
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alnem
This is gonna be a good year!
Member since 2/06 9562 total posts
Name:
Emily
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Re: Legal/RE Advice - Help.
Posted by lbelle821
Thanks for the input ladies and I'm going to look into those things. A few more facts I should mention because I'm not sure if it matters. First, I live in New Jersey so I"m not sure if the laws are different. Also, yes, they did use a realtor and I could go that route. However, one thing I'm concerned about is that my realtor is a friend of mine (who doesn't practice anymore) but I want to be sure that they don't go after her. I think my first step is to read the title insurance policy carefully and then consult a lawyer about it. Any more suggestions are certainly appreciated. Like I said, it just doesn't seem fair and I really just feel like my hands are completly tied. Thanks again.
ETA - no, there was no $500 closing credit.
oh, that does change things a bit. the laws in NJ are definitely different than those in NY. i hope everything works out for you...
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| Posted 11/17/06 5:29 PM |
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dandr10199
Grace is growing up too fast!
Member since 10/05 11561 total posts
Name:
Dina
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Re: Legal/RE Advice - Help.
Posted by lbelle821
Thanks for the input ladies and I'm going to look into those things. A few more facts I should mention because I'm not sure if it matters. First, I live in New Jersey so I"m not sure if the laws are different. Also, yes, they did use a realtor and I could go that route. However, one thing I'm concerned about is that my realtor is a friend of mine (who doesn't practice anymore) but I want to be sure that they don't go after her. I think my first step is to read the title insurance policy carefully and then consult a lawyer about it. Any more suggestions are certainly appreciated. Like I said, it just doesn't seem fair and I really just feel like my hands are completly tied. Thanks again.
ETA - no, there was no $500 closing credit.
I work for a title company in NY, but we are licensed in NJ. The title company should have pointed out that the property was in a flood zone to your attorney before the closing. I may be able to help you out. I you want me to FM me. Sorry that this happened to you.
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| Posted 11/17/06 7:10 PM |
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thiadora
Happy Little Girl
Member since 5/05 3830 total posts
Name:
Thia (Cynthia)
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Re: Legal/RE Advice - Help.
Good luck. I am sorry that you are going through this.
ETS: I did not see your later post that the property was located in New Jersey. Laws vary from state to state. Maybe some of this is different in NJ.
Message edited 11/17/2006 10:57:46 PM.
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| Posted 11/17/06 10:53 PM |
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dandr10199
Grace is growing up too fast!
Member since 10/05 11561 total posts
Name:
Dina
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Re: Legal/RE Advice - Help.
Posted by thiadora
I work for a title company and what they told you is true. The flood search is not covered by your title policy. If you contact the underwriter regarding this, the claims department will send you a letter denying liability. (The policiy insures that you own the land, not the condition of it.)
There are certain searches that the purchaser's attorney orders through the title company that are not a part of the insurance. These searches include (but are not limited to) the C.O. search, Housing & Building Violations searches, Fire Violations searches, sewer search, a search to determine who maintains the streets. The title company orders these searches from a company that is dedicated to conducting searches in the municipal departments. The company that I work for has never ordered a flood search on behalf of the lender. I don't even think that the search companies we use do that search. (I have been there 5-1/2 years; in the industry for 8 years) Mostly I have seen the lender do it through one of their own companies. (This is what our lender did when we bought our home.) Your recourse would actually be with the research company that conducted the search, and you might be able to sue them.
Our company has ordered flood searches on behalf of the lender. I have not seen it often, but I have seen it. I agree with finding out who did the search and try suing them.
Message edited 11/17/2006 10:59:58 PM.
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| Posted 11/17/06 10:59 PM |
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dandr10199
Grace is growing up too fast!
Member since 10/05 11561 total posts
Name:
Dina
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Re: Legal/RE Advice - Help.
Xpost sorry
Message edited 11/17/2006 11:01:01 PM.
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| Posted 11/17/06 11:00 PM |
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