We bought a house (built in 1965) on Dec. 18, 2006. Six days later, heavy rains flooded a storage-room area on the lower level. We called the real estate agent, who claimed that the prior owners had no knowledge of any water problems and suggested we call a handyman, who came over and did some work. The room has continued to flood. Is it possible to bring legal action now or is there a statute of limitations on this type of thing? — Nancy
Every state has a statute of limitations, which means that after the statutory period of time, you can no longer file a lawsuit. In the District of Columbia, where I practice law, it is three years; it will vary by state. You should check with a local attorney to determine what this period is in your state. And although you discovered the problem on Christmas Eve, if you are still within time, I would treat the day you bought the property as your target date.
However, you raise a key question: How difficult would it be to prove that your seller knew about the problems? If you can find repair or plumber bills during the time your seller owned the property — or if neighbors are willing to testify that they saw plumbers in the property on several occasions — that may be strong enough to take the matter to court.
But litigation is time consuming, expensive and always uncertain. Perhaps you would be wise to chalk this up to a bad learning experience and correct the problem on your own.
My daughter and her husband own a small, unoccupied, well-maintained home that has been on the market since October 2007. They have received no reasonable offers to buy and have been under a great deal of pressure from the Realtor to reduce the price. They did reduce it by $20,000, but still no offers have been made anywhere close to the asking price. In February they took the house off the market and listed it with a rental agency. Among the interested parties was a rent-to-buy offer. They are not sure how safe this situation is, but feel that someone who may purchase the home in two years would take better care of it than a short-term renter. What is your advice on such an arrangement? — Dinah
Clearly, having a rental income and having someone live in the house is better than having no rent and a vacant property. There are two kinds of rent-to-buy arrangements:
One is rent with an option to buy. Here, you set a price that the tenant will buy at the end of the stated term. There is no guarantee, however, that a sale will ultimately take place. Furthermore, this is a gamble on both sides. The property may be more valuable two years from now, but you will be selling at the price you set today. Alternatively, the market value may decrease, in which case your tenant will either want to negotiate a new price or walk away from the transaction.
Another option is the right of first refusal. No price is set, but at the end of the term, you try to sell the property and when you get a valid offer, your tenant has the right to match it.
In either situation, you need a local attorney to assist you in drafting the legal documents to reflect your agreement. So long as you get a decent tenant, I agree that if the tenant ever plans to buy your property, he or she may take better care of it.
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