Dealing With Property Damage Prior to Closing
LESLIE: On our way to Alaska now where Ron listens on KENI. And it seems like you’ve got yourself a real Money Pit. What’s going on over there, Ron?
RON: (chuckling) Well, I feel kind of foolish. I purchased a repossessed home back in January of this year. And it was, you know, kind of as is. The place had really been – not vandalized but mis-taken care of. The carpets were gone. The place is just a mess. And anyhow, but that was fine. I bought it as is. But the further we went along from when I signed the purchase agreement, it was about a ten-week period in there before we closed. And the vandalism continued …
TOM: Oh, no.
RON: … and so the damages continued. I guess I was curious to know is – should still be responsible for that until the actual date of closing?
TOM: Well yeah, but if – have you closed yet?
RON: Yes, we did. This was last January.
TOM: Well, it’s a little bit late right now. I mean, absolutely. Because you entered into a contract based on your perception and your understanding of the condition of the house and the date you signed the contract. If things change between the date you sign the contract and the date you close, then you certainly should be entitled to renegotiate that contract. But now you’ve got a problem of trying to establish the history as to when vandalism occurred and things of this nature. And trying to pursue a claim against the government right now after this thing has closed, I just see this as a real bees’ nest. Yeah, you might be able to get some different advice from an attorney, but it just seems like a real difficult situation.
Have you assessed its condition? Do you have a game plan for attacking this house and getting it back in shape?
RON: What I’ve done is, since January, I’ve completely remodeled the home. And I mean it’s a great house and I’m very pleased about the outcome. It’s just the added expenses. What I did have for – because they had it with a management company, there was a written record of each time the home had been broken into and the damages that had occurred.
LESLIE: And is that still occurring now?
RON: No, this was before I purchased it.
TOM: Yeah, but Ron I’ve got to ask you, why are you bringing it up now? Why didn’t you bring it up at the time of closing?
RON: I did. I had brought it up at the – before closing. The thing that happened was because it had taken so long to get the home sale finalized because of the condition of the home, I had – still had this in question even at the time of closing. But I had been kind of reassured that the problems would be taken care of.
LESLIE: Yeah, but with …
TOM: Who made that assurance?
RON: The HUD agency and their management company.
LESLIE: But you know what? Ron, when you buy a HUD home, generally, these are urban areas that are being redeveloped so you’re almost like a pioneer in your own right because you’re moving into a neighborhood that’s generally different and you’re going to find a lot of changes and you’re going to find a lot of vandalism potential. So it’s almost like buyer beware a little bit.
TOM: Ron, unless they’ve made written assurances to you at the time of closing that there was going to be some action that they were going to take, then maybe you’ve got a claim. If not, I’m afraid you’re going to have to just enjoy that house the way it is.
Ron, thanks so much for calling us at 888-MONEY-PIT.
LESLIE: You know, you’re buying these HUD homes in hopes – you know, not guaranteed – that this neighborhood is going to improve. And it might not improve over a year. It might take five years; ten years. So you’re sort of investing in the future.
TOM: (chuckling) You know what? You know what I think happened? I think he overspent on the improvement and now he needs to find a way to get some of the money back.
LESLIE: Well yeah, because if you overbuild for that neighborhood and you’re the only person that’s moved in and improved, you’re just wasting your money …
LESLIE: … because no one’s going to pay a ton of bucks for a bad neighborhood.
TOM: Yep. Yep. Next time, if anything happens to a house, folks, before you close on it, that’s the time to deal with it. After you close, it’s a whole new ballgame.