Now that you own your home, you probably think you’re done. You might be, but what if something suddenly “pops up” that you feel warrants action by the seller? For example, let’s say that after you move in, you find a crack in the foundation that extends from one corner of the foundation to halfway up one side of the structure. You never saw it during the walkthrough and the inspector missed it. It isn’t a recent crack, yet the seller never said a thing about it to you. Your warranty doesn’t cover it, so what do you do? Do you take action against the seller for not disclosing this to you, or do you take action against your inspector for negligence in not finding or discussing the crack? Or do you just have to deal with it on your own?

This chapter focuses on what happens after you move in. You might think you’re done dealing with the seller, but instead you might encounter something that forces you to talk to him and see if he knew about the problem. If he did, you then need to decide what’s going to be done about it. This chapter takes you step-by-step through what to do if this happens to you.

If you’ve found something wrong with the house and it’s something you believe you should have known about, the first thing you should do is contact your Realtor. Tell your Realtor why you thought the seller knew about it and didn’t disclose it. She can then carefully review the disclosures you received from the seller to determine whether any mention of the problem was made in the documents. If the crack was mentioned in the disclosure documents, you are, unfortunately, stuck with repairing and paying for it on your own, and you likely have no recourse against the seller.

However, if your agent sees that there was no disclosure, you have a strong basis to pursue the seller for financial compensation so you can have the problem fixed. If the seller is willing to pay the repair costs, the issue is settled. If the seller refuses to talk about the situation, you must decide if you want to pursue mediation, arbitration, or litigation. See Chapter 13 for a discussion about mediation, arbitration, and litigation.

When the seller is approached to find out if he knew about the problem ahead of time, a few things might happen. First, he might have lied about it during the sale process. A seller might do this because he didn’t want to torpedo the sale, so he chose to remain silent in hopes you wouldn’t uncover the problem until it was too late.

Second, the seller might have known about the crack, but he didn’t intentionally hide it from you. For example, the crack might have been hidden from everyone’s view because it was under the carpet of a finished basement. The seller had owned the home for a dozen years and intended to get it repaired, but as the saying goes, “Out of sight, out of mind.” He might have forgotten about the crack and failed to disclose it to you, but this memory lapse doesn’t excuse him from liability.

Third, he might have known about the crack, but considered it in the overall scope of things to be too insignificant to warrant mentioning. That’s his error and will not protect him from liability.

It’s also possible that the seller’s agent may have been involved in the efforts to conceal the defect from you. The agent may have been fully aware of it and chose not to disclose it as a way of pushing the price upward, an act that benefits both him and his client. In such a situation, both the seller and the agent can be found liable not only for the costs of remedying the problem, but also for fraud, which can produce much larger damages at trial.

Constructive knowledge of a problem means that the agent knew, or should have known, about the problem because of something else that was going on. For example, maybe you found mold that you didn’t know about before. The seller’s agent claims he didn’t know about it, but he did know that the washing machine overflowed and not only soaked the floor and walls, but also leaked under the door to the downstairs room and soaked the wall-to-wall carpet in that room, too. As it turned out, this leak resulted in the mold. The seller’s agent said the home never had mold but never told you about the leak that caused the mold. It costs you thousands of dollars to remove and replace all of the laundry room walls and the carpet in the family room. Even if the agent can prove that she had no direct knowledge of the mold, it is possible that she had constructive knowledge of the defect.

In another example, a seller told her Realtor she had remodeled the home two years ago, adding on 2,000 square feet of space to the home. The total square footage was listed as 4,500 square feet. Six months after closing, the buyer told her contractor that the home was 4,500 square feet of living area. The contractor immediately recognized that the number was not right, and that the square footage was much smaller than that, by more than a third. The seller’s agent never questioned the size that the seller claimed, and he was held liable for fraud and nondisclosure. As a professional, he should have recognized that the square footage had been greatly exaggerated. Had the actual difference been minimal, such as 50 to 100 square feet of the claimed 4,500, the Realtor likely wouldn’t have been held liable.

Both examples illustrate constructive knowledge of a problem that was not disclosed to a buyer. In such a case, you have a good chance of recovering your repair costs or the extra costs for paying for what you thought was a larger home. In most cases, the damages you’ll recoup likely will be paid by both the seller and the Realtor, with the total not to exceed your damages unless you can prove deliberate fraud. In such situations, suddenly you may reap punitive damages in addition to your actual damages.

What happens if the problem is something the inspector missed and the seller didn’t lie about? You should ask your agent to talk to the inspector and find out if he saw the problem and, if so, why he didn’t mention it. If he explains that he did see it but didn’t mention it for whatever reason, it’s up to you to decide whether you want the inspector to provide some compensation for this. If he admits he missed it, definitely consider seeking compensation from him.

It’s inevitable—you’ll move in and something will need to be fixed. When an issue with the home or any of its systems or appliances occurs after you close, it is very unlikely that the seller will agree to repair this type of defect. In most cases, the seller believes the sale is history and there’s nothing further to discuss. You’ll have to fix the appliance or system yourself. This is why these systems are turned on during the walkthrough—to check that they work. If you do want to talk to the seller, you can ask him to fix something. He may say no, and if you want to pursue it, you may have to go through mediation, arbitration, or a lawsuit. Or maybe he’ll say yes and the problem is solved.

Keep in mind that some appliances may still be covered under an existing manufacturer’s warranty. Also, if you have a home warranty and included riders for appliances, you may be able to get an appliance fixed or replaced for a nominal service fee. Again, if the warranty expired and it’s something you want to pursue with the seller, you may still have to go through mediation, arbitration, or litigation.

Other warranties are worth checking out if you have an issue with your new home. If it’s a newly constructed house, a warranty may cover construction defects. It holds the builder responsible for any physical defects in the construction of the home and usually is good from one to three years. Notable exceptions exist, however. For example, Mississippi has a structural defects warranty covering six years from the date of construction. Although it didn’t pass, Arizona voters in 2008 considered a 10-year warranty. Even though it was defeated, its mere existence on the ballot shows that the idea of extending warranty protection for home buyers is under consideration.

California has a 1-year specific warranty from the builder, but a 10-year implied warranty against construction defects exists under California law. However, in what can be called a balancing attempt between plaintiff buyers and builder defendants, the 10-year period may be tempered somewhat by the date you first discovered the problem and when you brought it to the builder’s attention. Various statutes of limitations apply to the different types of defects you might discover. So the 10 years is the absolute maximum time you have under this implied warranty. But statutes of limitations aside, even if you’re within the statute period, the fact that you delayed an appreciable amount of time may have caused further deterioration and you likely will not be permitted to collect for that portion of the damage. A final decision will be made by the arbitrator or court.

If you find yourself in this situation, you can go two places for guidance: your Realtor, or the local board of Realtors and your attorney. But whatever you do, don’t wait. Any delay may void your warranty rights.

The Uniform Commercial Code law, found in some form in all states except Louisiana, is not designed to cover a home purchase, but is designed to regulate commercial dealings of many different types. How does it relate to your home purchase? Well, some of its individual sections may have some connection. For example, implied warranties on appliances, fixtures, and building materials may protect you on those items, or application of liens on removable parts of the land parcel the home is situated on. This refers to mechanic’s liens placed on fixtures removed from the land. Fixtures are items added to the property that are so attached they are legally considered as if they were an original part of the property. The implied warranties are unwritten warranties for a particular use or purpose related to a specific object. For example, if you bought a washer, there would be an implied warranty that it would wash your clothing. This is because it would be reasonable to expect that you bought it with that use in mind. Similarly, implied warranties could exist on materials used in the construction of the home you just bought because it would be reasonable to expect that they would be used in its construction and should be fit for the purpose.

In the former instance, implied warranty of merchantabilityor for specific use, any recourse would be back to the manufacturer or the dealer from which the item was purchased. Also check with an attorney to see if you have any other rights under the code.

A statute of limitations is a legal time limit you have to start a lawsuit. In most cases, the clock starts running on your time limit either at the time the cause of your dispute initially occurs or, in some cases, when you first become aware of an issue.

Rules and limitations vary from situation to situation and state to state. Therefore, the best advice is, do not delay when you feel you have an issue and your attempts at resolving it have been unsuccessful. Check with an attorney about how much time you have under the applicable statute of limitations law. This is not to suggest that you shouldn’t attempt to resolve your dispute amicably before resorting to litigation, but don’t waste your time doing so. When the statute has run out, it’s over—and so are your chances of any further recourse.