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Irwin Law
Irwin Law, Lawyer
Category: Real Estate Law
Satisfied Customers: 7343
Experience:  Lawyer- Broker 30+years - foreclosure, short sale, liens, title attorney.
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How do i limit liability on realestate (residential condo)

Customer Question

how do i limit liability on realestate (residential condo) sale 12 months ago. as owner 4 years ago, i performed a significant remodel. when i uncovered hidden structural issues to a support beam from a remodel 15ys prior, i notified the HOA mgmt company, showed the issues, was told they could not affect repair, but they would reimburse materials costs, paid a permit to city ($76 on $2000 remodelling) performed the work, disclosed the work in the selling documents.
an issue arose because the upstairs unit owner threated legal action against the HOA and the current buyer claiming cracks in plaster were the result of this repair 4 yrs prior. i was presented with the bill generated by a contractor that performed work to current direction by the HOA, but somehow the current buyers responsibility (the hoa paid a structural engineer to 'reassess' the original repair) for $3800.
i am most worried about assuming further liability by any action on my part. the structural engineer assessment was that my submitted engineering drawing to show i was replacing damaged structure with at least as performing as existed - the 16' beam replacement was structural glue-lamination 2.6x load (static and dynamic) as the original douglas fir beam, using engineering services at the lumberyard where materials were purchased.
Submitted: 10 months ago.
Category: Real Estate Law
Expert:  Irwin Law replied 10 months ago.

Good morning and thanks for using Just Answer. I am not sure what you mean by "limit your liability". Are you referring to making yourself judgment proof by divesting from ownership of any assets? In the liability factors themselves, cannot be changed at this point, but it sounds like you have done everything the law requires of you with regard to disclosure. You did that by disclosing everything you knew about the defect and the repairs that were made when you sold the condo. Your buyer would have a difficult time proving a case of concealment or fraud. Generally, under the standard disclosures now provided for in real estate law, the owner is responsible only for disclosing what is actually known about the property. That you never investigated and learned of the concealed condition resulting from defective remodeling before you purchased it, you could not be held liable for that. Likewise, complete disclosure of the condition and repairs that you undertook, would satisfy the disclosure requirements. As they say, the facts are what they are, and you can't change them now. If someone is now pursuing you for damages, you should consult a local attorney who handles this type of case to see exactly where you stand. From my vantage point, I would say that your risk is minimal.

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Customer: replied 10 months ago.
by liability is was referring to:
* paying some or all of this current $3800 bill to rework my repairs to satisfy the upstairs unit owner
* being asked to 'contribute' to any further actions, by either the upstairs unit, the HOA, or the current owner.
it has been presented to me, by the original realtor who represented both me(seller) and the buyer as if it was a condition of sale, (i.e., at time of sale, i paid a handiman $175 to complete a list of 'minor' repairs identified in the inspection report as condition of sale). my son (who resided there) had already moved back home (california) so i just agreed to complete the sale.
the structural engineer report indicated a 1" deflection in the 16' beam as the cause of upstairs cracking. there had been, since the original repair in 2012, two instances of flooding, caused by upstairs units, that the HOA paid us damages for flooring, ceiling and wall repairs.
my concern is what responsibility should i assume for this repair; as a nice/responsible guy, does contributing some or all of this bill make me liable for future issues.
complicating factors, the building department permit just listed $2000 in remodeling, the permit seems to have been filed in Boulder for unit 13 (we were unit 3 and there is no unit 13 in the 24 units in the building) - located by scanning all permits granted for that building in Aug 2012; i did not use a certified civil engineer, as it was deemed at the counter that i was just repairing by replacing a compromised existing beam.
i answered questions through the realtor for both the structural engineer and the contractor doing further changes.
i pointed out the following in the assessment:
* the deflection was measured from beam to floor, but the floor was known to be out of level (an additional repair was to even out the cement floor with 12x80lbs of concrete leveling cement after using hydrolic cement on a significant/but not considered structural crack hidden under old carpet.
* at least some of the deflection was sagging plaster - a result of the two previous water leaks)
the simple truth is, engaging in a local realestate lawyer will be an expense at least as much as paying 1/2 the bill.
yesterday's voicemail threatened legal action by the current owner if i don't make this 'right' before 9/30.
Customer: replied 10 months ago.
on my own i found C.R.S. § 13-80-104, which seems to indicate that responsibility for substantial improvement to real property is 6yrs, with an additional 2 years to bring action.
Expert:  Irwin Law replied 10 months ago.

does contributing some or all of this bill make me liable for future issues.

This is what you have to be careful to guard against. Remember, "no good deed ever goes unpunished".

The construction details are too complex to go into in a forum like this. If you pay anything at all towards the repairs, you should insist on a full release , which negates any admission of liability(again, an attorney is recommended) ,signed by the HOA, current owner and upstairs owner. My guess is that the HOA will balk at signing anything. I have my doubts that CR.S. 13-80-104 applies. What you did were repairs, not substantial improvement, which would be something like a room addition. No one has a "rollover" liability case against you. It is small money, and difficult liability. Most attorneys would decline it, but you could end up in small claims court, which can be very time-consuming. At least those are the main factors that I can see from this distance. Good luck getting it all worked out favorably.

I hope that I have provided excellent service and, if so, would love a 5 star rating. If not, please let me know how I can further assist you. There is no additional charge to you for rating me. A bonus is not required, but is always appreciated.

Thanks again for using JUST ANSWER.

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