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John Legal
John Legal, Attorney
Category: Legal
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Experience:  Over 15 years legal experience.
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In September of 2012, I bought a 3bd 2bth home for 125k from

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In September of 2012, I bought a 3bd 2bth home for 125k from the seller who agreed per contract (drawn up by our broker) to install a new hoa approved septic within a certain amount of time following the purchase. The septic system was completed in November 2012 by the seller, and the whole process was overseen by our broker. I was not involved or consulted during the process of the installation nor was I able to live in the home during these months; I was simply informed when the installation was complete. Now I am currently trying to sell the home. I received an offer for 128k from a potential buyer and we entered a contract. Inquiries from this potential buyer about the status of the septic system led me to contact the engineer who designed my septic system and he revealed that he was given the wrong information by the previous owner on the size of my house. He was told it was 2 bedrooms, not 3 bedrooms. The state requires a septic system's capacity to be 120+ gallons per bedroom. So the system he installed has a capacity of only 240 gallons for my 3 bedroom home, which is 120 gallons short of state requirements. While the state and the hoa approved this system, they did so relying on the information that the previous owner (and perhaps the realtor) gave them when they pursued the installation of the septic according to contract. This information on the size of the house was clearly a misrepresentation since the home has 3 legal bedrooms and has always been represented in real estate as such. Consequently, the potential buyer for my home has backed out and other buyers have walked due to the concerns with the size of the septic system. And so, my question is: what can I do to make this right? It would seem that the previous owner who installed the septic system is at fault for misrepresenting the size of the house which he knew very well since he had it advertised as 3 bedrooms. There is limited space on my lot and I doubt that the septic could be expanded at this point. What are my options?
Submitted: 1 year ago.
Category: Legal
Expert:  John Legal replied 1 year ago.
Welcome! Thank you for your question.

Did your contract with the previous seller specifically require the septic to meet the state regulations?
Customer: replied 1 year ago.

The contract reads "HOA approved septic system to be installed post closing but no later than...." This is a gated lake community in rural Ste. Genevieve county, MO. The hoa must approve all septic systems prior to the purchase of a property, but all new systems must be approved by the state before the health dept will permit installation. So, the health department permitted the installation of this septic system based on the misinformation that was given that the home had only 2 bedrooms.

Expert:  John Legal replied 1 year ago.
John,

Sorry for the delay. The failure of the seller to have a proper septic system installed is likely a breach of contract. While you would be much better off if the contract was clear that it must comply with state regulations, it is generally implied that contraction contracts must be properly inspected and meet regulations prior to being completed. If this requirement was written in your contract rather then HOA requirements then Your case would be clear cut. The seller is going to defend the suit by saying that they met the explicit terms of the contract because they met the HOA regulations which do not have the same volume requirements as the state.

You do have enough of an argument that state regulations must be met on all constructions so they are in technical breach of contract. Given your contract it is not a slam dunk. Your next step should be to demand the instillation of a proper fitting septic.

If they refuse you are going to have to sue for breach of contract. The damages you are entitled to are not for the lost sale but just for the cost of bringing the current system up to code. If this requires replacement then you can sue for the cost of replacement.
John Legal, Attorney
Category: Legal
Satisfied Customers: 4631
Experience: Over 15 years legal experience.
John Legal and 4 other Legal Specialists are ready to help you
Expert:  John Legal replied 1 year ago.
Thank you for the positive rating. Please ask for me if you have another question.
Customer: replied 1 year ago.

Thanks for your help. What would be the best way, in your opinion, to try and resolve this situation? The broker used both by me and by the previous owner in the transaction also worked as a developer of the community, and he was responsible for ensuring that the contract went as planned. I was thinking about talking with him to see if he could mediate a resolution with the previous owner rather than taking the approach of litigation. Is there any danger in this approach? If it is advisable to take such an approach, is there anything legal that I should be aware of before doing so?

Expert:  John Legal replied 1 year ago.
Very good questions. I think it is a great idea to go back to the broker and point out that the original septic tank did not meet state requirements. I would suggest starting out asking for their help to get it corrected to assure that it meets requirements. I would suggest no threats, yet. If the broker is on your side then you have a much better chance of getting this settled. There is no risk of trying to settle the claim. Nothing that you say in the course of settlement negotiations are admissible in court. So long as you file suit within 5 years from the date of the breach of contract then you have no risk of spending some time to settle.

John
Customer: replied 1 year ago.
Hello, I have a update to the situation I discussed with you, and I am hoping you might help guide me. I contacted the broker and the previous owner of the house-both of whom claim ignorance of the size septic that was engineered to be installed. In any case, as it turns out, there is no space to expand the septic system. So, I cannot force the previous ower to expand the system. I am stuck with a 2 bedroom septic system for a 3 bedroom house. Now, given the fact that the previous owner was under contract to install an approved septic system for said house, can I still litigate even though the system cannot be expanded? In other words, can I sue for damages, to receive the difference in value between a 2 bdrm and 3 bdrm home in the area, for instance? What suggestions would you have here?
Expert:  John Legal replied 1 year ago.
Thank you for following up. You can absolutely sue for damages. Your damages would be the decrease in value of your home because it can only be called a two bedroom home. You are correct. Your expert would be an appraiser giving you a value based on both a two bedroom and one bedroom home in the area. In fact, I would imagine your damages would be even greater since it cannot be expanded.

John

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