Buying a Home As-Is. If the home inspector finds significant or material issue with the home. The buyer has the right to walk away from the deal.
By Ilyce Glink and Samuel J. Tamkin
Q: We are buying a home that was listed as an “as is” sale. It’s a 110-year old farmhouse. We had an inspection recently and discovered there was no septic system on the property. Just a short pipe that goes into the woods.
Looking back at the seller disclosure statement, they simply checked “unknown” under septic system. The listing clearly said the home had a proper septic system. One of the sellers is a building inspector in the county we live in. I have very little doubt that they knew there was no septic and were dishonest on the disclosure. I just didn’t know if there were any options we had.
Buying a Home As-Is Condition
A: While some people prefer to buy a new home or a newer home. Some folks appreciate and enjoy the charm of an older home.
But with a 110-year old home, you may have unusual challenges that come. If the house hasn’t been updated to conform with changing building codes and new building materials.
Let’s start with the “as is” condition. Many people have bought homes in “as is” condition or even sight unseen. In the current housing market craze. January 2022 was the most competitive housing market in history. With 70 percent of homes selling in bidding wars, according to Redfin. Plenty of homes are being sold as pocket listings. That is, they’re selling privately without even being listed in the multiple listing service.
It’s hard to tell from your email. Whether you’re in the process of buying the property or you’ve already closed. And for some reason just had the home inspected. So, we’ll address both options.
Home Inspection Might Allow You to Walk Away from Deal
In many contract forms used for purchase and sales of residential homes around the country, the buyer is given an opportunity to inspect the home prior to becoming bound to purchase the home.
During a home inspection. If the inspector finds asbestos, a leaking oil tank, a structural problem in the home or any other significant or material issue with the home. The buyer has the right to walk away from the deal.
If you haven’t closed yet, and you’re still within the inspection period, take a look at your contract’s language. If your contract gives you the right to walk and get your money back. You may want to do that given the cost (financial, time and annoyance) you’ll face to install a septic system or add your home to the local municipality’s water and sewer system.
Owners Knowledge of Home Selling As-IS
It’s interesting that you say the seller checked off “unknown” on the septic system question. Given that the seller is a home inspector. We think it is highly unlikely. That he wouldn’t know how sewage and wastewater would be disposed on his own property. We don’t know how a home inspector seller can, in good faith, reasonably put down that they don’t have knowledge of their home systems. Even a non-home inspector seller will know whether their sewer system is tied to a municipal sewer system or whether they have a septic system.
An average homeowner may not know the intricacies or even the workings of a septic system. They’ll know they have one. In larger cities, you may have an owner who has never heard of septic systems, but they are quite common in some suburbs and areas that are located further away from densely populated areas.
Purchased Home As-Is and Found Major Issue
Having said all that, let’s now assume you didn’t walk away from the deal (perhaps because you didn’t know) and closed on the home. We’re wondering why you had the home inspected post-closing. Was there an issue? Or, did you wander out back and discover the pipe and sewage?
We have to state that it’s quite uncommon in most of the country to simply have raw sewage running out of a pipe behind the home. And, we can’t imagine it’s legal anywhere according to current building standards.
If the home is now yours, you should find out what your local building ordinances require for residential sewage systems. Then, talk to a few contractors about how much it will cost to install such a system. While finding that information, you’ll want to investigate how someone built a home without any proper disposal system for the home’s sewerage. And why the local municipality didn’t require it to be upgraded.
Recourse for Failure to Disclose
We suspect your real question is whether you have any recourse against the sellers for their failure to properly disclose the lack of any sewer system. On this question, you’ll have to ask a local attorney for advice. Your state’s seller disclosure laws may give you the remedy to terminate the contract. And walk away if you haven’t already closed. Those same laws may give you the right to get damages from the seller for expenses you incurred prior to the termination of the contract.
We understand that you’re purchasing (or have purchased) the home in “as is” condition. That doesn’t excuse fraud. Your sellers likely knew enough not to check off “septic” or “no septic” because that would raise questions. It appears they may have been trying to fudge their way through and leave you to foot the bill. But since the seller’s profession is inspecting homes, it’s hard to believe they didn’t know.
Find an attorney with experience in seller disclosure issues. Who can help you think through your options and understand any remedies that may be available to you.
Copyright ©2022 by Ilyce Glink and Samuel J. Tamkin.