I am currently in a lease-purchase agreement.
Before signing the agreement I had the property inspected by a licensed home inspector and appraised by a licensed real estate
agent / appraiser.
The home inspection
did come back with, as the seller promised me, typical maintenance
items associated with a 20 year old home, but it failed to mention all of the mold and rotting wood within the sub floor. The report contained 6 photos that were either focused too far out to see mold and rotting wood, or they were photos of the best looking areas of the sub floor at a distance. The report did mention moisture in the crawlspace along with falling down insulation between the floor joist and water stains on the foundation walls that he could not determine if they were recent or active. The recommendation was to remove the insulation to keep from trapping moisture. Again, no mention of mold or rotting wood even after I directly asked about what the presence of moisture meant and what shape the sub floor was in. I signed the lease-purchase agreement thinking at this point I needed to have control of the property to take care of these "minor" repairs only to find out the true condition of the sub floor a few weeks later when I called a crawlspace specialist to come remove the insulation and look at the foundation stains in depth. He informed me, with a slew of proper photos, that the moisture in the crawlspace has been high for a long time and the ground water seepage is active. The photos revealed mold, rot, a highly active moisture problem, and "light" ground water seepage into the crawlspace. After 3 more specialist, 4 quotes total, I found out that the repair, waterproofing, and remediation costs of just the crawlspace averaged over $40,000. The cost does not include the risk that I will be taking after the repairs. The insulation between the joist is still concealing several square feet, so technically I could have another $60,000 in sub floor rot repair, another $100,000 in complete floor replacement (carpet, hardwoods, etc...), and who knows how much more mold remediation may be required in everything above the sub floor.
The house appraised for $237,000, and my contract amount is $229,000 with the lease portion ending in 8 months.
The seller did know of the moisture problem prior, but was probably just as ignorant as me about the gravity of its affects and the state of the crawlspace at that time. Cooks Pest Control pointed out the moisture problem 10 years ago claiming the sub floor venting didn't meet building codes
, so the seller paid them to add vents. This year ServPro provided water damage services for a slow leaking water heater and pointed out the moisture problem again (20% moisture content in the sub floor woods). The ServPro rep documented it in his report that's still around.
The seller's insurance denied mold and water damage claims a week ago based on the state of the crawlspace being due to improper maintenance over the years.
The seller has stated that he wants to help the situation, but doesn't have much equity in the property; 2nd mortgage
Help, please! What should be my next step?