Home Buying in Los Angeles>Question Details

johnny5alive, Home Buyer in Santa Monica, CA

I found mold after we closed escrow. The seller did not disclose the defects and my agent represents both sides, definite conflict of interest

Asked by johnny5alive, Santa Monica, CA Wed Sep 26, 2012

what kind of rights to I have as a buyer? I kept saying all along that there was a moldy smell under the sink, it was also in the inspection reports as well as an obvious leak that was supposed to be replaced. My agent kept saying there was no smell and until i made them open up the drywall and saw a lot of mold as they were replacing pipes (after escrow closed-- which still did not remedy the leak). I was pressured and advised by the agent to take a small lump sum of money from the seller in exchange for signing a release of liability. Who is at fault, the agent or the seller and what are my rights as a buyer if these defects were not disclosed or taken care of?

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CA has real estate agency laws...here is a 48 page document that may assist you in determining if there was a conflict of interst. In addition, review all the documents that you signed. If the seller provide a home disclosure of any kind and the question of mold was not addressed you may want to look further. Also, if you did not have a mold inspection performed the obvious may not have been detected under a general home inspection. I live in FL and the fact is that mold is everywhere. If one owns a bottle of Tilex then they have mold....not to make too light of what may be a serious problem, you need to have some inspections conduction to determine the mold levels; afterwhich you may want to see the advice of a competant lawyer.
0 votes Thank Flag Link Sun Sep 30, 2012
You should have had your own agent! Read your buyers advisory... Didn't you have an inspection?
Were you blindfolded in taking this kind if a deal?
If you signed off or took money in exchange for anything, you're out of luck, it's on you.
2 votes Thank Flag Link Wed Sep 26, 2012
Dear Jonny 5,

The person who should have noticed a moldy smell and leak, would be the person who is qualified to identify such things. That would be your home inspection professional, who you say , noted the issue and reported this to you. As far as what was behind the walls, it's very doubtful that any of the parties knew of this and that is not something the average inspection could uncover.

In the Residential Purchase agreement all buyers are advised to "satisfy themselves" as to any condition that might effect the property. They are also advised to order any and all inspections necessary. This puts the responsibility on you, the buyer. When you signed off on the inspection contingency, you are saying you are satisfied.

You mentioned that you signed a release of liability acknowledging there were issues with the condition of the home, which you were willing to assume.(by signing that document)and recieving payment .

Your only recourse now is to consult with a Real Estate Attorney who can advise you.
1 vote Thank Flag Link Wed Sep 26, 2012
If you as the Buyer discovered a potential issue during escrow, and presumably when your contingency was active, you had rights to inspect further, negotiate a credit or cancel. Property in California is sold as-is so the seller didn't have an obligation to remedy a problem unless specifcally agreed to. It is unclear why you accepted a lump sum of money, what it was intended for and what your damages are. Another question mark is: "as well as an obvious leak that was supposed to be replaced". Who was supposed to make a repair? If the mold was not evident until the drywall was removed, what disclosure could they have made as to the presence of mold? You may need to consult with a real estate attorney to clearly understand your rights.
1 vote Thank Flag Link Wed Sep 26, 2012
Once you agreed to take the money and signed a waiver, it was a mutual decision between you and the seller. Hopefully the credit you received can cover the cost for remediation. If all of you saw the leak and you opened the drywall after you closed the seller or the agent could not have seen a "lot of mold".
You could have asked them to open the wall and had the mold inspection before you signed off on the contingency.
1 vote Thank Flag Link Wed Sep 26, 2012
Unfortunately, it would seem you were not well advised if you did not get a mold inspection after its presence was suspected. Unless the seller knew, which you cannot prove, he or she is not liable. It is up to the buyer to do their due diligence. Once you release your inspection contingency you have agreed that you are satisfied. This is not a good situation. Sorry.
1 vote Thank Flag Link Wed Sep 26, 2012
Mold within walls cannot be considered to be a "known condition" it is a latent defect.
If you suspected mold, you should have pursued this further prior to closing. You say your agent "pressured" you. How? Did he/she make you do something against your will?
You may have some recourse against the Agent and Seller, but it will be an uphill battle. Contact an Attorney.
Frankly, this is precisely the reason I tell everyone that there really is little value in having an Agent represent both the Seller and the Buyer. There are too many possible conflicts of interest that can get in the way of the fiduciary responsibility of the Agent.
1 vote Thank Flag Link Wed Sep 26, 2012
Sorry to be blunt, but sounds like you are screwed. It was on the inspections report before closing - you should have forced the issue. You took a lump sum settlement with a release of liability. If you signed the release, it is just that - a release of liability. Check with a real estate atty.

One of the main reasons I don't like when a real estate agent acts for both sides. But buyer also has to take responsibility in this scenario.
1 vote Thank Flag Link Wed Sep 26, 2012
Johnny,

It sounds like you were informed of the mold problem in the "INSPECTION REPORT".

If you accepted cash from the seller and signed a release of liability, you may have put the seller in the clear.

Mold is a serious problem, and if you have an inspection report that states mold was discovered, you should have requested a remedy from the seller prior to closing. The seller may not have been aware of the mold, as it usually is in places not visible to the naked eye.

Was the lumpo sum you aceepted related directly to the mold? If so, you have already accepted the remedy offered by the seller.

You should contact a real estate attorney and ask if you have any action you can take against your agent. Did the release of liability apply to the agent as well?

Since you knew the agent was working for you and the seller, then you knew he/she would be acting in what he/she tought to be the best interest of BOTH parties. The lump sum and release of liabilty may have been a remedy the agent felt would serve BOTH buyer and seller best. The agent can only provide advice ,to act on that advice is up to the buey and the seller.

Best of Luck to you.

Kawain Payne, Realtor
1 vote Thank Flag Link Wed Sep 26, 2012
Johnny,

It sounds like you were informed of the mold problem in the "INSPECTION REPORT".

If you accepted cash from the seller and signed a release of liability, you may have put the seller in the clear.

Mold is a serious problem, and if you have an inspection report that states mold was discovered, you should have requested a remedy from the seller prior to closing. The seller may not have been aware of the mold, as it usually is in places not visible to the naked eye.

Was the lumpo sum you aceepted related directly to the mold? If so, you have already accepted the remedy offered by the seller.

You should contact a real estate attorney and ask if you have any action you can take against your agent. Did the release of liability apply to the agent as well?

Since you knew the agent was working for you and the seller, then you knew he/she would be acting in what he/she tought to be the best interest of BOTH parties. The lump sum and release of liabilty may have been a remedy the agent felt would serve BOTH buyer and seller best. The agent can only provide advice ,to act on that advice is up to the buey and the seller.

Best of Luck to you.

Kawain Payne, Realtor
1 vote Thank Flag Link Wed Sep 26, 2012
From your question, these defects were in the inspection reports, ans also you agreed to take a lump sum to release liability, therefore, you gave your rights away. You knew the problem, but did not do enough, or thought what you did was enough. Do not stress out. fix your home and enjoy it. Congrats on your new home.
1 vote Thank Flag Link Wed Sep 26, 2012
Did you do a mold inspection before the close of escrow or after? That is what your inspection period is for...to do inspections to verify the property condition. Did you do a home inspection? When did you find the leak?

These things should have been found and brought forth during the inspection contingency period and repairs should have been requested to fix the issue.

If your agent does not want to do anything, go to his/her manager for resolve. If no resolve, you can request a mediation (if it was agreed to in your purchase conract).

Good luck!

All the best,

Kat Becker, Realtor
Estates, Residential, Commercial
Prudential California Realty
katbecker@hotmail.com
0 votes Thank Flag Link Tue Oct 2, 2012
Johnny5alive:
I know it's hard, but best to keep to the facts, and get them organized in outline, so when you speak
with an attorney (one who has handled many cases just like yours), you'll make it easier for the
attorney to tell if they can help you.

The contracts, and releases that you've signed are important. You attorney will advise you if there's
a way to over come the release etc. Proving that the seller and/or agent knew more than they told
you, may be hard. It may also depend on what they did prior to the sale: ie: did they paint over
everything to ourposely hide the water stains, and mold that they knew were there? If it was a
rental prior to being sold, maybe the tenants never told them, and the seller never bothered to
check?

It sounds like three of more leaks in this post, and major damage. From what I read, sellers are
not obligated to fix anything unless they agree to. If they agree to make repairs, I'd think you would
refuse to close escrow until you feel the repairs are done as you agreed. Mold remediation
contractors are very expensive, but $30K is a good size job. I hope you didn't buy the money pit.

You may also want to look into alternative contractors: try the WoodWizards.com.

Good luck.
0 votes Thank Flag Link Mon Oct 1, 2012
I ended up not taking any of the money and though I signed a release of liability that the seller drew up, it was upon receipt of Kitchen Plumbing funds, so does that make the agreement null and void? He ended up paying for the plumbing cost which he should have and should have been on repairs list. But the agent kept assuring me that it would be done and the seller was going to take care of it but didnt need to and was doing it "in good faith".

Seller has already agreed to pay for remediation and rebuild but I dont think they realize its going to cost about $30k all in. I have mutiple estimates for remediation, as well as rebuild. How to proceed? negotiate a lump sum? how much of this is the negligence of the agent who repped us both? Can I seek legal recourse against him? Shouldnt it come out of his commission? he was sloppy with everything throughout the whole deal. Request for repairs were not even fulfilled til AFTER close more than 2 months after requested.
Not only was their mold, a water heater leak, and refridgerator leak. The drain pan for the water heater was #1 on request for repairs! Seller already remedied and paid for water heater leak but the mold is the big one which is yet to be negotiated. talking to attorney tomorrow.
0 votes Thank Flag Link Mon Oct 1, 2012
johnny5alive:

Sorry to say that you made common mistakes of:
a) Not having your own representation.
b) Agreeing to a negotiated settlement with no contingency for discovering hidden damage.
c) It sounds like someone made ineffective repairs?

Now you're wondering if there's a way for you to recover from your unfortunate mistakes of
inexperience. Think baseball - three strikes, and you're out!

Fix it and move on. Unless you are facing a $50K or more size problem, and get legal advise
that you have a really strong case against your realtor that will net you more than you spend,
you have no good options, but to learn from it.
0 votes Thank Flag Link Fri Sep 28, 2012
Your description is a little confusing. If the inspection report included a leak that was obvious what was the resolution? Usually the inspector reviews material around the leak such as the floor and wall where there are often water stains. They poke them for softness and/or use a moisture meter. What does the report say about the leak? Did you and the Seller agree on repairs or credit for repairs? Did you have someone give you an estimate for repairs while in escrow?

In short the question is what did you agree to when you discussed the leak and damage during escrow? Did the Seller not live up to what was agreed to?
0 votes Thank Flag Link Thu Sep 27, 2012
Admittedly, it doesn't look good for you, since you noticed the potential issue yourself, and signed off with a monetary payoff. My first question is: how much will it be to correct the issue? Unless you can prove the seller knew and failed to disclose, or prove the pressure from the agent (not in your best interest), and/or show that you relied on any inspector's advice to NOT further investigate(?!), those would be where there was any failure on the part of someone other than yourself where they might even be partially responsible.
0 votes Thank Flag Link Wed Sep 26, 2012
I wonder if people really read the question line by line word for word before they answer.
0 votes Thank Flag Link Wed Sep 26, 2012
It depends on many factors such as 17 days inspection period went by and released any options of repairs unless it was disclosed. You signed a release of liability, which makes it even more tougher to determine. A mediator would resolve the problem. Was it a short sale, REO, regular sale? The mold may be able to be rectified for just a few hundred dollars. Is the leak visible where it is coming from? Is the mold in the wood, walls etc anymore? The damaged mold pieces will have to be treated and removed and safely discarded.
Did you buy a home warranty on top of homeowners policy? I would speak to your agent since he/she represented both sides and get an estimate to know what your dealing with. If the sum of monies you got already will cover the repairs then there you are.

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Sheryl Arndt, Broker – Loan Officer
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0 votes Thank Flag Link Wed Sep 26, 2012
I agree with many of the other comments. First of all, using the listing agent for your buyer's agent makes no sense to me. There is a clear conflict of interest there.

Second, as a buyer, you have a right to investigate anything that concerns you. You should have had a mold test done if you were concerned about it.

The agent's behavior sounds a tad questionable. At the very least, I would send a letter to the agent's broker. In terms of going after the seller or agent for damages, I agree that you should consult with an attorney and have that person advise you about your legal rights.

I'm sorry this happened to you...hopefully you can learn from this experience.

Best wishes.
0 votes Thank Flag Link Wed Sep 26, 2012
Good morning everyone,

You were at fault because you agreed by signing a release of liability. But if you feel you were misrepresented, consult a real estate attorney.

http://plpc.info/askalawyer
0 votes Thank Flag Link Wed Sep 26, 2012
First, this is an excellent example of why you should have your own representation.

From your relay of events, the inspectors found a leak, not mold. Did he recommend a mold inspection? It sounds like you knew there was something wrong and got talked out of doing anything till it was too late.

Without knowing the specifics it's hard to know what kind of case you have for getting money back. If you could prove the seller and/or the agent knew there was mold I would guess you would have grounds for getting money back, but that is VERY hard to prove. Either way, you need an attorney's opinion to know for sure.
0 votes Thank Flag Link Wed Sep 26, 2012
We had a discussion about this same topic...."Should the buyer use the listing agent as their agent". Some said yes, some said No. Some said that it betters the chance of the buyer getting the property, which I always say it is true. Either way you have no idea on how much your agent was fighting for you or doing something that was the easy way out just to make the deal work. You have to seek legal advice, look at all your paperwork that you signed. Save your invoices for the repairs to compare them with the amount of money you did receive. You did sign the paper releasing the seller of liability and I almost agree that in small writing it also mentioned your agent/ brokerage as well.

Well good luck, you will get pass this and enjoy the property like the way you should.

James
0 votes Thank Flag Link Wed Sep 26, 2012
Fault is not always laid on one party. Fault is apportioned on a percentage basis. Your case is a good example where fault may lie in more than one place.

You questions probably cannot be answered without further investigation. A time line of events along with a complete review of associated documents, inspection reports, letters, emails and telephone logs is in order.

You can do this investigation yourself, ask a lawyer or your broker to do it, or turn it over to a regulatory agency.
0 votes Thank Flag Link Wed Sep 26, 2012
You may wish to consult with an attorney who specializes in real estate, see exactly what rights you may have under local laws.....
0 votes Thank Flag Link Wed Sep 26, 2012
Ykes! What a mess. No wonder you are upset. Did you have a home inspection? Was any of this addressed?
think this is too complicated for us to answer on this forum. You need to see an attorney who specializes in this type of real estate law..
0 votes Thank Flag Link Wed Sep 26, 2012
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