Problem found during "walk through".

Asked by Bryan Alban, Los Angeles, CCA Sat Jun 14, 2008

I'm in escrow on a condo in West LA. On the walk through we noticed a spot on the kitchen ceiling.Longstory short, there is a leak from the upstairs unit, that is causing the prolem. Part of the ceiling will need to be replaced, and the seller is going to pay for that (or get the upstairs neighbour to pay for it).

My question is ....
Can I ask for a small adjustment of the price because of this problem? Because now when I sell the unit, I have to disclose that there was this problem. Or is asking for a price adjustment not right?

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Sylvia Barry,…, Agent, Marin, CA
Sun Jun 15, 2008
Hi Bryan:

Since this is a condo, you might want to check the HOA documents and figure out what the HOA covers as far as repairs are concerned. Being a condo, the HOA might be responsible for fixing the ceiling that's damaged due to the leakage between the upstairs floor and downstairs ceiling. If that's the case, then it will be covered.

I think one of the confusion is the fact you said you discovered that during 'walk through'.

We typically do not perform walk thru until right before closing. This means you would have already removed all contingencies, including inspection contingency. Then your option is limited. However, if that's not the case, and you are still in your inspection period while you walked through the house, then by all means, you can ask for extra credit to have the ceiling repaired if HOA does not cover that.

I guess the other issue is we are assuming the upstairs owner have already repaired the leakage? If not, the problem will come back. So the root of the problem also needs to be addressed.

If you already removed contingency, then the negotiation will be tricky - If you can prove the owner hide the facts knowingly, then you have more ground asking for compensation. Otherwise, it is your duty to have found that during inspection period. Franklin is right, the problems you discovered during FINAL walk thru is not a reason for you to not follow through with the sale - that's spelled in the walk through form.

Your agent and/or his broker should be able to give you better advise because they should know all the details.

1 vote
Franklin Far…, , West Los Angeles, Los Angeles, CA
Sun Jun 15, 2008
I am wondering whether or not you have a contingency.

If you have formally removed the physcial inspection contingency i.e. signed a contingency removal form, there is no contingency.

The purchase agreement specifically states that the final walk thru is not a contingency of the sale no matter what is discovered.

However, in order for the seller to be protected from a potential lawsuit, the seller should be issuing an amended Transfer Disclosure Statement (TDS) noting the ceiling situation.

You have 3 days after receipt of the amended TDS to accept and move forward or reject and cancel.

You are in a better bargaining positioning when this happens.

My best advice is to have a discussion with your agent's manager who will offer various options and present the legal ramifications of whatever action is taken.

Whether or not the seller can obtain the same price that you paid depends on the circumstances surrounding the sale. You have leverage if the property was purchased after it had been on the market for sometime or have had a price reduction or the final accepted price was considerably lower than the asking price. It's a different matter if it was sold in multiple offers.

In any event I believe this issue will more than likely be resolved in your favor.

All the best,

P.S. What is your agent's position on this matter? Is your agent being proactive in discussions with the seller's agent? You selected this agent who should be working for you. That person is part of the transaction and should be giving you the best advice. Trulia is merely a sounding board for opinions. The resolution of this issue is with the parties involved.
1 vote
Joan Patters…, Agent, Rancho Cucamonga, CA
Sat Jun 14, 2008
Dear Bryan,

You certainly can ask whatever you would like to, however, if the seller is willing to get the problem fixed, I would think that should take care of the situation. I would talk to your realtor and ask him or her what their opinion would be. I know this is frustrating for you, but it never hurts to ask if you would like a price reduction. Remember, the seller could always say, "no", but they could say "yes", so it does not hurt. An amendment can be done through escrow for the price reduction. I always ask anyhow, because you will never know unless you do! Sounds like you will still purchase the place, but they don't need to know this. Have you already removed all of your contingencies?
Good luck!
Joan Patterson, B.A., A.S.P., G.R.I., Realtor
Keller Williams Realty
8250 Whilte Oak, Ste 102
Rancho Cucamonga, CA 91730
1 vote
Bill Eckler, Agent, Venice, FL
Sun Jul 6, 2008

Our recommendation is to place more concern on an effective repair and not on disclosing it. In condos, as previously stated, water leaks are quite common.

If the repair is done in the manner it should will never know it was a problem and the future buyer will have to visualize in his/her mind the scope of the leak.

Be sure its fixed right!!!!

The "Eckler Team"
Michael Saunders and Company
Venice, Fl 34285
0 votes
Jim Finseth, , Hermosa Beach, CA
Sun Jul 6, 2008
You should contact the HOA president. If this is a leak in common plumbing, the HOA may cover it. I would start there.
0 votes
Bryan Alban, Home Buyer, Los Angeles, CCA
Wed Jun 18, 2008
Hi Sylvia,

I had removed all my contingency EXCEPT for the kitchen. On inspection the inspector noticed that there might have been dried water residue in the kitchen ceiling light. So we asked the seller who said that she wasn't aware of a problem. But we wanted to get it checked out anyway, so we brought in a water/mold inspector, and he found the problem.

So I am still "protected" by not removing the contingency in the kitchen.
0 votes
Gerry Davids…, Agent, Scott AFB, IL
Sun Jun 15, 2008
None of us are lawyers that I know of, so we can not offer legal advice. Do you still "love" the condo? Put the shoe on the other are the seller willing to fix the problem.....what else would you do? What's fair?
0 votes
Jim Johnson, , 78233
Sun Jun 15, 2008
If you need advice about your legal standing in this matter, you should consult with an attorney. As for the strictly business matters, let me first clarify a point. It is not a latent defect, unless it existed prior to the contract and was not disclosed. If so, you may have some legal options.

If it happened after the contract, and it is curable (sounds like it is to me), you should be satisfied to have it cured. You may however have the right to require that the ceiling materials be replaced, and not just painted over. Again, consult with an attorney. If it is sheet-rock (drywall), that would mean replacing the panel, taping, floating, texturing and repainting.

If it is curable, it also should not be a problem when you are ready for resale. It's cured.

I doubt for this reason that it gives you any leverage for renegotiating the price.
0 votes
Bryan Alban, Home Buyer, Los Angeles, CCA
Sun Jun 15, 2008
Thanks for the answers.

We can still cancel the contract because we didn't remove our contingincy fot this problem. With that in mind wouldn't the seller be wise to give us a little break on the price? Cause if we concel the seller has to:

1. Relist the property
2. Disclose these problems to the next buyer
3. Also the market has gone down since out offer was accepted, so the seller would never get what we offered by the next buyer.

It seems to me that we have the leverage in this case. I still like the condo, but honestly if I knew about this problem I would not have offered what I did.
0 votes
Debt Free Da…, , 85260
Sat Jun 14, 2008
When you bought the home you were planning on getting a home that was in good working order. The leak was unexpected. I don't think it is unreasonable to ask for a credit or a repair of the item.
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0 votes
Franklin Far…, , West Los Angeles, Los Angeles, CA
Sat Jun 14, 2008
Byran, you could ask for a price ajustment. The question is how much and will the seller agree to that amount.

If there is an agreement in price, you will then be responsible for dealing with the situation.

If the leak is caused from the unit above (i.e. over flowing washer, dryer, faulty toilet), that upstairs owner is responsible for any damage caused.

If the leak was caused by piping in the walls of the unit, the HOA is responsible for the repairs.

How soon will a determination be made as to the cause? When will the repair work start? Who will pay for the cost?

Determining the cause may take sometime and involve opening walls. Who will initiate that and who will pay for that?

If the HOA is responsbile no probem wlth costs.

If the upstairs owner is responsible when will he initiate the repair work and will he be responsible for the out of pocket cost before reimbursement from his insurance company?

An alternative would be to withhold monies in escrow until the issue is resovled and the repair work completed. Get an estimate and withhold 1.5 times that amount.

This way you can be assured that the work will be completed at no expense to you and the seller will have monies returned less any out of pocket costs you migh incurr.

All the best,
0 votes
Gerry Davids…, Agent, Scott AFB, IL
Sat Jun 14, 2008
Try to work with your agent. In my opinion this could be considered a Latent defect. I am certain your seller would proably have to issue a new disclosure, and yes, what if this happens again....what type of warranty do you have? If the seller won't come off price anymore...see if you can get an agreement from neighbor that if this happens again, they are responsible. Read your condo guidelines, maybe something is written in there to protect you and another possible buyer in the future
0 votes
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