What do sellers need to disclose? Previous structural engineering report?

Asked by HomeBuyer, North Carolina Wed Oct 31, 2007

We are buying a home that had a buyer this summer but the deal fell through for reasons unknown. We just had a home inspection and the inspector suggested a structural engineer should come and look at the property because of a wonky floor. We are hiring a structural engineer to come in and look at it. The seller's agent said that he would release the previous structural engineering report but only the section pertaining to the wonky floor and not the whole report. This has me really concerned. What is in that report? Is this ethical? Legal? How can I get my hands on that earlier report.

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9
Mike Kane, , Richmond, VA
Thu Dec 11, 2008
I would definitly contact his/her broker and demand that they disclose everything not previously repaired. If not, I would not be buying it. Disclosure is paramount and should be that selling agent's mantra. In Virginia, I am required to disclose any and all material defects of a house I list. I tell my clients that it is my ethical duty to disclose it, and they are required by law to disclose any and all defects to me. I advise them to repair it befor we sell it. If they don't want to do that, I will not work with them.

Especially a structural defect! I can't imagine anything worse except a fire hazard.
1 vote
Josh M. Boggs, Agent, San Antonio, TX
Wed Oct 31, 2007
Not sure how you feel about this and I know you don't know me personally so take this as you may.... but... my opinion is... your gut is usually right! I've actually seen client's get their emotions into overdrive about a house and tried to overlook small tell-tale signs and I kept warning them that it might not be the house for them...

sure enough... they bought the house and found out that the house had MAJOR defects that will now prevent them from selling the house unless they get them fixed because they NOW know about them. As for going after the sellers... their attorney's have stated that there is too much doubt as to the fact that the sellers did know that the defects were there at all....
In the end... their gut and my gut was saying no..... unfortunately... we've got that God given ability to feel things out... but it also means we've got to listen to them.

What is your gut telling you?
Web Reference:  http://www.jmbsa.com
1 vote
J, Agent, Greensboro, NC
Sat Dec 13, 2008
Wow, this appears to be a lawsuit waiting to happen! In an effort to protect your best interest, you may want to add in your offer to purchase contract a request that the seller release the full and current report. Ethically, you should not be put in the position to request the full report as it should be given to you or any other buyer looking to purchase the property.
0 votes
Pam Winterba…, Agent, Danville, VA
Wed Oct 31, 2007
Here is California the seller has the obligations to disclose any and all reports done on the property within the last two years. They affix to the property and should not selectively give you bits and pieces of reports. Disclosure is disclosure. Bless us here in California.
0 votes
HomeBuyer, Home Buyer, North Carolina
Wed Oct 31, 2007
Our structural engineer came out today and said that wonky floor is due to the kitchen remodel. When the kitchen wall was remodeled it now started carrying more weight. Although code at the time was only to have one joist per wall, with the extra weight the joist needs to be reinforced with a steel attachment.

I hate feeling like the sellers are hiding something else though and you're right about feeling like there is bad air. The floor sag was not disclosed in the listing agreement. The listing agent says it is because the previous engineer thought it was due to poor installation of the baseboard rather than a true sag. Therefore cosmetic rather than material. I'm tempted to contact the previous buyers directly and ask them what happened.

My parents are saying to back out of the deal altogether.
0 votes
Josh M. Boggs, Agent, San Antonio, TX
Wed Oct 31, 2007
Bottomline: disclosure means disclosure. The seller has the right to refuse giving you copies of their purchased inspection / engineer's report that are irrelavant to known or disclosed defects in the property. HOWEVER... if i were representing the seller... I would HIGHLY suggest they release the entire report just to help clear up any bad air. If your sellers are being very tricky about dislosing... then as a buyer.. I'd be very wary.

Always remember... depending on your state laws... as in TX.. the Buyer has up to 2 years to go back and sue the sellers for non-disclosure. Just a word of thought.
Web Reference:  http://www.exposedhomes.com
0 votes
Patti Pereyra, , Chicago, IL
Wed Oct 31, 2007
Hi Homebuyer:

It is not likely that the company who did the structural inspection will release the report to you. The report is actually 'owned' by the person who paid for it, and it is only released with express permission from that owner.

In fact, when you obtain your own inspection that you pay for, you will not be obligated to release the entire report to the seller, nor can the inspection company release the report without your permission, even if you request certain repairs of the seller.

If the sellers were made aware of any defects through this previous report, they are obligated to disclose them, as they are now known material defects.

If the Disclosures they filled out do not show anything of note, they are either truly unaware of any defects, or they are lying.

Now, accusing them of lying would be a pretty bold move, especially when you do not know what the structural engineering report reveals.

Therefore, your best plan of action is to continue on your course of performing your OWN due diligence. Pay for the structural engineering inspection. You will then have your OWN report, and you will not have to share it with the seller. Then you can make the decisions based on that.

Do be sure, however, that the engineer you are hiring is reputable, highly experienced, and comes highly-recommended with references.

This might sound like an obvious question, but... has your Realtor asked the listing Realtor just why the previous deal fell apart? Deals fall apart for myriad reasons, the 2 major ones being: Financing, inspection results. When you say 'reasons unknown', I'm wondering if it's because nobody's asked, or if the Listing Agent is simply keeping mum to protect his clients' interests.

Please let us know how this all pans out.
0 votes
HomeBuyer, Home Buyer, North Carolina
Wed Oct 31, 2007
Awesome....great idea. I'll contact the other engineer directly. Our own engineer should be at the property in 1 hour. We'll see what he says. Thanks so much. Oh, the angst of home inspections!
0 votes
Holly Grigai…, Agent, Cottonwood, AZ
Wed Oct 31, 2007
Generally, a report will belong to whoever has paid for it. It is more or less, intellectual property prepared for one or more individuals. Copying it, and providing it to others could be construed as copyright infringement....some companies will have in the contract to perform the work a restriction that does not allow them to provide a copy of the report. However, if this information is material to the value of the property, the seller must disclose information he now has pertaining to the property. To get a copy of that report, find out what engineer did the report and see if you can pay them for an additional copy. And then hire another engineer for a second opinion.
0 votes
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