How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Gerald-Esquire Your Own Question
Gerald-Esquire
Gerald-Esquire, Lawyer
Category: Real Estate Law
Satisfied Customers: 3920
Experience:  30 years of experience.
77476456
Type Your Real Estate Law Question Here...
Gerald-Esquire is online now
A new question is answered every 9 seconds

I'm in the process of purchasing a house. Two days prior to

Customer Question

I'm in the process of purchasing a house. Two days prior to close I became aware of a major water event that occurred in the home (obviously, post-inspection) causing them to file a claim on their home owners insurance. I was misled (with purposeful intent) on the extent of the damages andrepairs.During my pre-close walk-thru there were blatant signs of water damage & it was clearly not fully repaired.
I brought two experts with me to assess the water damaged area during this walk-through, and both believe there was a lot of work that should have been done, but was not. The two experts who gave me this opinion include the licensed home inspector who conducted the initial home inspection, and an owner of a water restoration service company referred to me by my insurance agent. The opinion of the two experts and my homeowners insurance agent (from the same insurance company to which the claim was made) is that they pocketed a large portion ($10k minimum) of the amount paid out to repair the damages. Am I entitled to view the insurance claim/adjustment that documents what was deemed as "damaged" and the amount of money they were given to rectify said damages? Furthermore- are they required to give me whatever money they pocketed from that insurance payout that was supposed to be used to fully repair the water damage?
Based upon the following clause in the Purchasing Agreement- I believe this to be true, and would like to confirm.Casualty Loss: Risk of loss by damage or destruction to the property prior to the closing shall be borne by seller, including any deductibles(s). In the event any damage or destruction is not fully repaired prior to closing, Buyer, at Buyer's option, may either (a) terminate this agreement with prompt return of earnest money to buyer or (b) elect to close the transaction, in which event Seller's right to all real property insurance proceeds resulting from such damage or destruction shall be assigned in writing by Seller to Buyer.
Submitted: 1 year ago.
Category: Real Estate Law
Customer: replied 1 year ago.
Also- if the seller refuses to provide this information to me and repair the rest of the damage-- can they back out of the sale? Are they allowed to back-out of the sale for any reason at this point? I ask because I have A LOT vested in this... I just want this to be made right and they give me what I'm owed.
Expert:  Gerald-Esquire replied 1 year ago.

Hello,

Thank you for using Just Answer. I want to provide you the best service I can. Please feel free to ask any follow up questions you have.

I am an attorney with 30 years of experience; I hope to provide you information that will help you in resolving your question.

I imagine that you are looking for confirmation of that which you already know. In quoting from the purchase agreement you have already answered your question:

"Buyer, at Buyer's option, may either (a) terminate this agreement with prompt return of earnest money to buyer or (b) elect to close the transaction, in which event Seller's right to all real property insurance proceeds resulting from such damage or destruction shall be assigned in writing by Seller to Buyer."

That answer is Yes, you can walk away or if you wish to move forward demand a proper accounting of the money's received for the damage and assignment of any funds paid for that damage."

It is likely that the seller will refuse however, and then you will either walk away or try to obtain additional concessions. The dollar amounts that you are describing, while significant, are not sufficient to justify the costs of the litigation to enforce the provision in regard to seeking the funds. The attorney's fees (not to mention the time investment) likely will not warrant such litigation. You can of course insist that the repairs be completed properly and to your satisfaction, have the price reduced by the cost of the additional repairs, or walk away.

I hope the information I provide is useful to you. I want you to be comfortable and satisfied with my attempt to assist you. Please, if you have ANY follow up questions, feel free to ask. Please note that I am generally unavailable Friday evening through Sunday.

Please do not forget to give me a positive rating. It adds nothing to your costs but it helps me greatly. Thank you.

If you are dissatisfied with my response PLEASE let me know before giving me a negative review so that I may try to be of better assistance. Or if you prefer, let me know and I can “Opt Out” and your question can be re-posted without additional cost to you. I will be fair to you and only ask the same from you.

Good luck.

Please note: Information is educational and not given as legal advice. Only your local attorney can give legal advice. I can't establish or accept an attorney-client relationship with you. All posts are available for public viewing.

Kind regards,

Gerald

Customer: replied 1 year ago.
Even though they tried to present the home as fully repaired, and it clearly wasn't- I have no right to see the claim on the property? Even though this happened post inspection and the property from here on out will be flagged as having water damage? Do I not at this point own the property in terms of equity, and therefore entitled to said equity paid out by the insurance company?
Expert:  Gerald-Esquire replied 1 year ago.

Hello:

Thank you for the opportunity to clarify my response.

My response was intended to say YES you have a right to see the claim and to have an accounting of the insurance funds paid and the receipts for the work done. Also you have the right to have an assessment (as you did in fact have) of the work that was done. You have the right that the work be done properly. Nd you have the: "right to all real property insurance proceeds resulting from such damage or destruction shall be assigned"to you.

What I was also trying to relay was the practical situation as well. Just so that you would be prepared. I do not want to leave you with an impression and expectation that the seller would just role over and give you what you want (and are entitled to). These things generally tend to get messy. So I wanted you to be prepared for that potential so that you could make fully informed decisions.

I hope this additional information is helpful to you.

Kind regards,

Gerald

(Please do not forget to rate me – click the five stars. It adds nothing additional to your costs, but it helps me greatly. Plus it is good Karma for you. Thank you.)

Customer: replied 1 year ago.
Okay, thanks for clarifying that for me. So in the (unfortunate) likely event they "refuse" even though I am entitled to it-- is walking away my only real option? Other than suing them? At this time, they are currently refusing to do so and I pointed out that clause to them and I have not received any sort of response to me pointing that out to them and I did that on Thursday. I guess I don't understand how they can say no if it's a part of binding contract.
Expert:  Gerald-Esquire replied 1 year ago.

It is part of the contract and you can take the house and sue them for breaching the contract or you can walk away. If you sue you will have to hire an attorney and tie yourself up for 18 months to maybe 2 years fighting this in court.

I'm not saying it is right or fair. It just is. You've indicated that the amount at issue is probably $10,000.00. But we really don't know the cost of properly repairing the damage to the house or what residual damage there may be.

Also if the seller is being this way over something obvious, what else may they not have disclosed.

I can't tell you what is best for you. Only you can. But in my experience there are always other houses. And also, sometimes the universe is sending us a message. What WE think is right for us may not be. And we don't know it until we get through the event.

Listen to your gut instincts (not your hopes, or desires, or sense of justice - but what is best for you) about this deal.

I hope this additional information is helpful to you.

Kind regards,

Gerald

(Please do not forget to rate me – click the five stars. It adds nothing additional to your costs, but it helps me greatly. Plus it is good Karma for you. Thank you.)