How might a disclosure dispute arise?

Real Case/Real Problem - Buyer makes an offer pretty close to the asking price. Deal is quickly struck using real estate forms provided by the buyer’s broker. Buyer walked through the house several times, and through his agent asked several questions. Seller answered through his agent. Both are bachelors. House has a hot tub but because seller has been living with his girlfriend for the past couple of years he’s not opened the hot tub. When asked if the hot tub works he conveys it’s been several years since it was used but if the buyer would like to pay to fill it up and turn it on he can find out exactly how well it works.

That was the extent of the questions and answers.

Deal closes and within a few weeks buyer’s agent is calling seller’s agent and in turn seller’s agent is calling seller.  Hot tub had several problems including the heater and other things that needed to be fixed; all to the tune of over $1,000 in repairs. The company that did the repair work took the opportunity to bad mouth the maintenance along with the previous homeowner’s lack of doing the right maintenance. Seller at this point has no input nor does he hear what is actually said to the repairman or by the repairman. All he knows is he’s now being asked for over $1,000.

I get the call. “What can I do?”

Negotiate was my answer. Why he asks? It’s pretty simple really. Here are several reasons that may be important to you.

• The disclosure form did not say enough and could create the impression the seller believed there was nothing wrong with it.
• There was no written disclosure about the use history and the fact the hot tub had not been opened for several seasons.
• The hot tub had not been opened for several seasons and did need repairs.   
• And probably most important, because my time will be at the rate of $375 per hour. Who in their right mind wants to pay legal fees to iron out a dispute? Isn't it better to spend a little now and try avoid conflicts at a later time? Of course it is.
• An attorney for the buyer will likely charge a similar hourly rate.
• This will take hours to litigate.
• Seller signed an offer agreeing that loser pays attorney fees. Do you have $40,000 to spend on two law firms fighting over what was or was not said?

How Resolved?

Seller paid an additional $750 to buyer. That means seller received $750 less in equity for his home.

Would it have been worth paying $250 up front to have us review the disclosures being made before handing out the Iowa Sellers Disclosure Form to a potential buyer?

Answer: Yes. In this instance the seller would have easily saved $750. You be the judge.

This area of the law is a mine field – so don’t be the one who steps on a landmine. Call us, contact the Lombardi Law Firm and ask for either Steve Lombardi or Katrina Schaefer.

CONTACT INFORMATION

The Lombardi Law Firm

1300 – 37^th Street, Suite 4

West Des Moines, Iowa 50266

Telephone: 515-222-1110

Fax: 515-222-0718

Email: sdlombardi@aol.com or katrina.schaefer8@gmail.com