We recently purchased a foreclosed home bldg. code violations were not disclosed.

Asked by Rich Leonard, Cary, IL Wed Dec 9, 2009

We hired an inspector, bank had it inspected all said it was FHA approved. I checked with bldg. dept. in person they did not disclose code violations to me while I was there. We purchased the home and 1 day after we received the keys there was a violation notice on the door. Shouldn't someone be held responsible for these costs? The home should not have been sold since it was not FHA approved. Inspector or bank or bldg. dept. should share the costs as far as I am concerned. Any information would be greatly appreciated.

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8
Matt Baggett, Agent, Nashville, TN
Thu Sep 23, 2010
I'm trying to understand how it isn't FHA approved if the bank said it was? Did they just say that it was and you bought it for cash? Or did you get FHA financing? If you got the financing--it had to be FHA approved right? I tend to think you are on your own as far as the home inspector goes. Their reports often have disclaimers protecting them on every other page or so. Did you buy the home as/is with the intent to work on the areas that were damaged? Meaning were you pulling permits anyway? That must be an awful feeling to buy something and then get slapped immediately from the authorities. Good luck and I hope it gets worked out for you.
0 votes
Linda Kelleh…, Agent, Sandwich, IL
Thu Sep 23, 2010
In Illinois and possibly other states? Inspectors, that i think you referred to, means home inspectors. They do not quote/uncover building code violations. Did city building dept ever inspect this home prior to sale? I can't imagine them keeping that info from you as they have nothing to gain here. My main question would be out of curiosity..what was the violation? "FHA" approved only means that you can get an FHA insured loan on this property. If you paid cash or purchased conventional, FHA wouldn't apply and the property can be sold otherwise. Nobody should rely on just an FHA inspection when purchasing. If the home inspector happened to uncover the "violation" in his Inspection report, it is doubtful he would have listed it as a code violation, but that same issue "should/could" have surfaced in his report to you. More info is needed
0 votes
Mack McCoy, Agent, Seattle, WA
Wed Dec 9, 2009
Yeah, it depends.

There's certainly more to the story, which precludes a useful answer.

Based on what you're telling us, I think you're on your own here.
0 votes
Rich Leonard, Home Buyer, Cary, IL
Wed Dec 9, 2009
Thank you so much to all of you for your input, it is very helpful!
The violations are: The attached garage was turned into an in-law suite w/o a permit, the steps and the headway to the 2nd floor are not in code. Therefore, must be torn out, rebuilt and headway extended. Holes must be put in walls to ck for proper electrical, window has to be replaced with shatterproof glass. The detached garage was partially rebuilt w/o a permit. It caught fire and has a portion of siding not yet completed. Have to rip a portion of the upstairs garage floor out to verify it has correct beams, etc. Master bath step to shower is not to code and must put hole in wall to check for proper ventiliation. There are several other items but I will start with those. The health dept. also had a violation on the house, however, we were able to clear that up at no cost. The lady from Bldg dept. was out with the inspectors who caught all of this and sd the guy I spoke to probably didn't use the right screen and didn't see the violations. There were court dates set for the previous owners, etc. The loan guy we worked with admitted that his dept. at the bank will be fined $17,500 for selling the home not FHA approved so he is trying to work with us to cover his butt. Total costs are $9,280.00. I understand we bought it as is, thought maybe someone might know about disclosures on foreclosures. Especially, when I showed up in person and asked before signing the papers.
0 votes
Larry Hines, Agent, Algonquin, IL
Wed Dec 9, 2009
Rich what were the violation(s)?
If you went to the village hall and they said their were no code violations when you went, the Home Inspector, appraiser, realtor, attorney, would not know of any either. You should contact the village and get an explaination of how "they" missed informed you. When you purchase a foreclosure, I tell my clients you get what you see and what you don't. they are sold "as-is" for a reason.
FHA does not check for "code violations" when the appraiser comes out. They have repairs the can call for if the appraiser deems it to be necessary.
Sounds to me the village is the one who you may have a case against. They are the ones who missed informed
0 votes
Jeff K, Home Buyer, Bristol, PA
Wed Dec 9, 2009
Hi Rich,

>> DAN QUOTE >> You say you hired a building inspector. That means you paid someone something like $400 to say the house is fine, or has these problems. If the inspector did not find such problems and they are verifiable you should have a legal case against that inspector. The inspector should have insurance that covers such mistakes.

Well Dan may be right. But your inspection was likely just a standard "general inspection". If you take a look at your inspection report, you will see many areas where they say things like, "the plumbing appears to be in good condition but this inspection doesn't provide a comprehensive review blah blah ... you may wish to have a separate inspection performed on this area by a licensed plumber". And the list of areas like this will go on and on.

May we please know WHAT the violation is for? Is it something big? All details that you can share would be welcome. That might help to reveal whether it's the kind of thing that a general inspection would normally be expected to find, or if it's something that would only turn on by a more specialized inspection.


>> Who recommended the inspector? Was it your realtor, banker, or you? If your realtor recommended them they have E&O insurance to cover such problems. If a banker did they should have something to cover you also.

I honestly wouldn't expect your realtor or bank to have anything that would cover you here, unless there is something about IL law that's quite different from what we're used to out here. But I would be very glad to be wrong about that. If there's something in writing from the bank that certifies the property as "FHA approved" that relates to no current violations, that would be very nice.

Jeff
0 votes
Dan Chase, Home Buyer, Texas City, TX
Wed Dec 9, 2009
You say you hired a building inspector. That means you paid someone something like $400 to say the house is fine, or has these problems. If the inspector did not find such problems and they are verifiable you should have a legal case against that inspector. The inspector should have insurance that covers such mistakes.

Who recommended the inspector? Was it your realtor, banker, or you? If your realtor recommended them they have E&O insurance to cover such problems. If a banker did they should have something to cover you also.

Talk to your realtor, explain what happened and see what if anything they are willing and able to do for you. They may be as upset as you are. They may even be able to help you start whatever you have to do to make a formal complaint.

Seriously, I would contact your senator and/or congress reps. Explain how you had this problem and how the FHA rules were broken. They may be able to help you. Just go to their office with copies of your proof. A lawyer sounds like a good idea.
0 votes
Vivian Janka…, Agent, Schererville, IN
Wed Dec 9, 2009
If the seller or the listing realtor are aware of the violations they are obligated to disclose them. You may be able to get proof that they were notified of violations from the city serving you the violations. You should consult an attorney.
0 votes
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