Showing results for 
Search instead for 
Do you mean 
Posts: 1
Registered: ‎02-18-2013

Recourse on Lemon House Purchase

In Dec 2009 my wife and I purchased a 1950s era house in Castro Valley. We were first-time home buyers. We met our real estate agent through the mortgage broker (FHA load) and she seemed nice enough. 


During the inspection (inspector referred by RA) I noticed a rivulet track in the dirt in the crawl space and asked if this was something to be concerned about. Both my agent and the inspector assured me that it was nothing to worry about. We knew there were issues we'd have to address (floors redone, windows replaced, painting etc.) and relied on our realtor's assurances - and signed on the dotted line. The next rainy season we noticed that the crawl space was a muddy mess and had a trench train installed in the front (the land slopes toward the house). Next rainy season we noticed mildew on the exterior walls and in the closet. This was cleaned and addressed with dehumidifiers. 


We recently had a contractor come out to due estimates in preparation for a FHA203 rehab refinance (the loan we should have initially taken, but didn't know about). During the inspection, the contractor observed that the moisture issue was related to the fact that there was no insulation down below -- and that the foundation didn't go go far enough and water was seeping underneath and into the crawl space. In retrospect, Add to that, I was talking to my neighbor and learned that the the area had flooded in the years prior to my purchasing the place - something that was not disclosed.


The old lady who previously owned the place had been renting it out the last few years and as since died. My wife and I are looking at expensive repairs we can't afford and wonder if we have any recourse against our realtor? The sellers' estate or agent? The inspector?


Any advice?

Super Contributor
Posts: 269
Registered: ‎08-24-2011

Re: Recourse on Lemon House Purchase

Do you have a copy of the inspection report?  Any mention of the foundation/rivulet?  Ultimately you're probably going to need to talk to a RE lawyer to see if you have a case.


You should also find out how critical the repairs are, and if postponing them is going to put your home at greater risk or not.  There is always something wrong with every home.  The issues you need to fix are the ones that are going to quickly grow more expensive or damage the habitability of the home.

Gold Super Contributor
Posts: 3,139
Registered: ‎06-01-2012

Re: Recourse on Lemon House Purchase

If the lot was improperly graded that is an obvious item the inspector should have seen.  The rivulet trail is a may or not have been serious.  The inspector should have noticed that and put that in his report too.  The inspector should have noted the two items and given a generic warning in his report and left it for you to decide.  As for the foundation, the inspectors can do a non invasive inspection only.  That means they can't look inside walls or behind electrical panels or do digging to see how deep the foundation is.  There are limits on what they can do.  Next time get a referral from redfin or yelp for a home inspector.  They should not have told you it will not be a problem if they were not sure.


I also think you should see a  real estate attorney.  You can get a low cost initial consultation and bring your home inspection report with you.  Find out what it would cost you to sue and what your chances of being successful are.  Remember even if you get a judgement they are sometimes difficult to collect.  Also, if they only made verbal representations about the problem, that is hard to prove.

Gold Super Contributor
Posts: 3,277
Registered: ‎05-04-2009

Re: Recourse on Lemon House Purchase

Highly doubt you have recourse that would make up for the court costs.


No house is perfect especially an old one. You pick your battles make your priorities and keep checking things off the list.


Sounds like the large issue with water under the home was delt with by you with the fixed drainage project. We just did this on a family members condo last summer. Pretty sure this is the first winter this property has ever had dry ground under it since it was built in 73. Next project is flooring and bathrooms, this summer we will replace the failed over garage deck/roof.


We attack the projects as the budget allows - some of it we have done our selves after getting many estimates from contractors which were obsurd - we simply did the research talked to a archetect about the fix and handle it our selves. Which has been 1/5th the cost all of the estimates were by all the contractors.


So pick your battles consider it a learning experience just be glad you own a home in the hottest RE market in the US and when the day comes to sell you will get your money back and probably more.

Platinum Super Contributor
Posts: 7,053
Registered: ‎01-04-2010

Re: Recourse on Lemon House Purchase


look for solutions not problems....Drainage issues can be fixed for a lot less than lawyer fees... Interior and exterior drainage control and a 6mil plastic vapor barrier will solve your problem...A lawyer will just cause you problems. Insulation will not stop moisture...trap the moisture under a vapor barrier...if there is additional moisture or mold, put a fan in the crawl space and put in more vents.

Super Contributor
Posts: 288
Registered: ‎02-21-2013

Re: Recourse on Lemon House Purchase

[ Edited ]

Like what was said above , the problem sounds fixable. I have had to do drainage repairs on every house I have bought  in the bay area. Grading / water run off was not really a consideration on most older homes here. I bought a house in Benicia last july and our first big rainstorm had me out in the yard with a shovel and pick digging drainage ditches so water would not come in the back door( almost did). So next summer will be putting in a cement swale and french drain around the rear of the house.