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 Dear George: I purchased a house last year from a private party, and neither of us used a real estate agent. The seller stated in the contract that he had no knowledge of any problems with several items—water heater, air conditioner; however, problems with these items exist, and I believe he knew known about them. Also, the house floods, and he didn't disclose it. The seller lived here for six years, and I cannot believe he never had water in the converted garage, now the living room. The driveway's pitch is toward that room, and when it rains hard water always seeps into that room. The paint was fresh on the floor of that room when I looked at the house—probably to cover any signs of previous flooding. The paint is now coming off the floor as a result of the water coming into that room on more than one occasion in the year I've lived here.
I think the seller lied in order to make the house more attractive. He should pay to have proper drainage installed to alleviate the flooding. Do I have any legal recourse? Is there a statute of limitations for bringing such an action to court?
Answer: Litigation can be costly in terms of money and emotion. If your damages are less than $5,000, represent yourself in small-claims court. If the damages are going to be more than that, hire an attorney. Before you do anything, communicate with this seller. Send him a certified letter with return receipt requested along with a copy sent via regular mail that includes the seller's disclosure used in the transaction. Highlight the items that you allege were misrepresented, and demand the amount of money you want this seller to pay you for the damages you have sustained. Point out to this seller that if he refuses, you will have no other alternative than to either pursue the matter in court.
Consult an attorney to review the merits of your case. There are a number of Texas statutes that determine statutes of limitations. If you have a claim, it would most likely be for fraud. The statute of limitations for fraud is four years and probably would have started when the seller signed and dated the disclosure notice. Texas law requires a seller of residential property of not more than one dwelling unit to deliver a seller's disclosure notice to a buyer on or before the effective date of a contract to buy the home, or within a specified number of days of the effective date. It also requires that the notice be completed to the best of seller's belief and knowledge as of the date the notice is completed and signed by the seller. If the information required by the notice is unknown to the seller, the seller must indicate that fact on the notice. If a seller fails to disclose known defects with a home, a buyer may have a claim for breach of contract, deceptive trade practices, and/or fraud.
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Dear George: When a REALTOR® refers a seller to another real estate agency to list and sell the home, is it Texas state law that the referring REALTOR® disclose to those sellers whether or not she will be getting a referral fee from the real estate agency who listed and sold the seller's home?
Answer: No, provided there is no agency relationship between the seller (principal) and the referring REALTOR® (agent). One cannot accept a secret commission without disclosing it to the principal. If there is no principal-agent relationship, the fee does not have to be disclosed. You can pay a fee to a referring broker who sends a prospect over, but does not represent the prospect.
Dear George: We bought a house in July 2006 and have been having major problems with the septic system problems. We recently learned that the previous owner had the same problems and never had them repaired. At the closing, we received the Texas Associations of REALTORS® form Information About On-Site Sewer Facility where the previous owners indicated there were no known problems. Neighbors tell us that the system malfunctioned on several occasions. What's your advice on pursuing this through litigation?
Answer: Based upon the facts you presented, you may justifiably wish to discuss your situation with an attorney. However, you must weigh the cost to fix the septic system verus the cost to hire an attorney. Also consider how solvent sthe seller is. It's often easier to just fix it, fix it right, and get the issue behind you. If there was a REALTOR® involved in the transaction when you purchased the property, you may have that REALTOR®'s name on the closing statement that the title company delivered to you. Call the Texas Association of REALTORS® at 800/873-9155 and ask to speak with someone regarding the association's Ombudsman Program. This program is designed to handle situations such as yours. Note that if there was a REALTOR® representing the seller, that REALTOR® may or may not have known anything about the septic system problems. But at least he would now be notified that there was and still is a problem.
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