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[timk519]

I`ve got some young married friends who bought their first house, passed on the house inspection on the advice of a realtor that was representing both sides of the transaction, and found out after taking possession that the foundation wasn`t settling right and the house was breaking itself apart.
The estimated cost raise the house, put down pilings to bedrock, etc. to get the issue fixed is $40K.

How should the proceed? Do they have any recourse to the original RE agent who recommended passing on the inspection?

 

[TerryF]

&*!# OUCH !!!

That must have hurt! Did the realtor give a personal guarantee/warranty of any kind and in writing? If not, I doubt there is a thing that can be done about it unless it is a newer home and still covered by a New Home Warranty.

A situation like this really drives home the point that you must do your OWN due diligence and never skip any steps while doing so. Good luck to your young friends and I hope something can be done for them.

 

[TerryF]

On second thought, if your friends can prove the seller or realtor knew of the problem and chose not to divulge that information when selling, then they may want to consult with a lawyer. I think it may be actionable in that case. There is some clause in the CREA listing/selling contract that asks the seller to declare any defects that they are aware of. If they say `no defects` then I`d call a lawyer ASAP.

 

[Thomas Beyer]

tough to prove that the seller or the realtor knew s.th. UNLESS you have a report from an engineer or home inspector that they have ordered, or if you can find witnesses that where told s.th., perhaps a neighbor or friend.

You will likely have recourse ONLY IF you can prove it ..

As always, walk with your eyes wide open, due your OWN due dilligence and if you can`t .. get an expert involved ! Do you remove your own teeth ? Do you prescribe your own eyeglasses ? Then why are you so sure that you can assess a property worth several hundred thousand $s yourself ?

Lesson learned .. expensive education .. learn and move on ..

In my "balance sheet of life" I have two columns: one for credit/assets i.e. stuff that benefitted me .. and one called "education" i.e. stuff that I paid dearly for and lost .. but I learned ..

 

[RedlineBrett]

QUOTE (timk519 @ Dec 22 2007, 12:25 PM) I`ve got some young married friends who bought their first house, passed on the house inspection on the advice of a realtor that was representing both sides of the transaction, and found out after taking possession that the foundation wasn`t settling right and the house was breaking itself apart.
The estimated cost raise the house, put down pilings to bedrock, etc. to get the issue fixed is $40K.

How should the proceed? Do they have any recourse to the original RE agent who recommended passing on the inspection?

This is why you should get an agent on your side and do your due diligence! Even if you know the house you want to buy find an agent and get someone on your side to write the contract UNLESS you really really trust the agent working both ends of the deal.

As a buyer you have nothing to lose by getting an agent on your side and if you know the house you want you can even SAVE money by asking them to waive part of their commish for not having to help you shop.

Anyways - what your friends need to do now is go and see a lawyer and tell them how everything happened. Get them to call their local real estate board and ask for advice as well. Not sure where your friends live but in Calgary our board drops the hammer on shady agents every month.

Also, call a few other GCs and get some second opinions on that $40k number.

How old is the home? If it`s less than 5 years old it might be covered under warranty.

Is there anything around them that could be comprimising their property? guy next door excavating or anything like that?

Best of luck!

 

[GarthChapman]

I learned a few years ago on a similar foundation issue, that, in Alberta at least, the owner is not under any obligation to disclose such a fault. It is Caveat Emptor (Buyer Beware).

In my `lesson experience` the Sellers knew the house had settled but did not tell me (no Realtor was involved), and I did not do an inspection as the house was only 6 months old. Never again. I only found out about it when the Builder called me to say there was a problem and they would have to do major repairs to the house. Luckily I was dealing with a very reputable Builder and a solid Developer. They had to jack up the house and `pin` it with commercial style pilings. It was about a $35,000 job! even paid me all my holding costs while the house was vacant for the repairs period.

However I would think the Real Estate Agent`s Broker/Owner would be the first person to contact. Real Estate Governing Boards really don`t like to hear about things like this. I would push hard to put some responsibility onto the Realtor. They have especially strong fiduciary obligations to you when they are in a dual agency relationship (double-ending the deal).

You may be best served by having your lawyer make the approach, although it maight be wise to see the Broker first and let him know if you don`t receive satisfaction quickly that they will next hear from your lawyer.

Also be sure to check into the New Home Warranty program. It may well be covered, and maybe all the Realtor has to do is pay the deductable.

Good luck, and let us all know how it works out.

 

[mcgregok]

If your in Alberta write a letter to RECA (Real Estate Council of Alberta) explaining the situation. They will start an investgation on the matter. It may take a while but they will investigate.
Good Luck


QUOTE (timk519 @ Dec 22 2007, 12:25 PM) I`ve got some young married friends who bought their first house, passed on the house inspection on the advice of a realtor that was representing both sides of the transaction, and found out after taking possession that the foundation wasn`t settling right and the house was breaking itself apart.

The estimated cost raise the house, put down pilings to bedrock, etc. to get the issue fixed is $40K.

How should the proceed? Do they have any recourse to the original RE agent who recommended passing on the inspection?

 

[happygrant]

As a Real Estate Agent in Calgary, I am very disappointed to hear of this. The rules regarding dual agency are very stringent and a seller cannot opt to not disclose latent defects, ones that may not be recognizable via a basic inspection by a layperson. In addition, the agent could be held liable for damages simply for advising his clients to not obtain professional independent advice with regard to a home inspection if it can be proven. In my experience I have had the situation where in order for my clients to be successful in their offer to purchase, a home inspection clause was not included even though I had informed them of the potential dangers in doing this, but had them sign a form stating they have been advised by myself of the potential pitfalls in proceeding this way.
I would suggest filing a formal complaint with CREA, and amassing all the information you can get, as purchasing a property through a real estate agent is supposed to provide a buyer with some protection and the Real Estate Association takes such matters very seriously. If there was any wrong doing on the Agents part the buyers will have some recourse although it could take some time.
Although the perception in alberta may be that buying a property in alberta is buyer beware, this is not true, especially when represented by a competent Real Estate Professional, with the clients best interests at heart. I would also suggest to anyone out there to avoid getting yourself in a situation where you are represented by an agent who is also representing the other party, as depending on the agreement made at the time, you may have seriously comprimised your position of protection in the transaction.
I personally feel that dual agency should not be allowed in this industry, just as lawyers are not allowed to represent both parties in a legal proceeding, however the current rules do allow dual agency and is further complicated by the fact that the current structure of the rules also put you into dual agency when dealing with two different agents from the same brokerage!
Anyway, look and see if there may have been some misrepresentation or wrongdoing, consult your lawyer and if you feel there may be a case there definately submit a formal complaint.
Good luck!