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My partner bought a house in June and she was not informed that there had been any insurance claims. When we were in there doing renos, we discovered some hefty water damage and we registered a complaint. We then discovered that there had been an insurance claim for that ($4901), and a big insurance claim for sewer/water damage in basement to the tune of $27,963. Sent a lawyers letter and recouped a little bit of money to repair the smaller water damage. Pissed off, but so be it. Or so we thought.
The house insurance policy she migrated over from her prior house is expiring in December so we went to switch insurance companies. The new company we ironed out a whole new policy with came back and set this: "Your file for home insurance was reviewed by our underwriting team, and there has been 9 claims on that house in last 15 yrs...I am very sorry [the company] is declining this insurance policy."
They attached the claim and it reads like this...
'94 Other Kind of Loss $1020
'94 Burglary/Theft on premise $3095
'91 burglary off premise $2605
'05 "Other Kind of Loss" $36,696
'04 Water Damage, Special, Sewer/Flood etc $0
'05 Other Kind of Loss $3505
'04 Water Damage, Special, Sewer/Flood etc $8331
'09 Water Damage, Standard, Building $4109
'09 Water Damage, Standard, Building $27,963
So some obviously serious claims of water damage (the two in 2009 are separate dates). And whatever the two sessions of "Other Kind of Loss" are (with same date), they total over $40,000.
So the seller never disclosed any of this, not even a single claim.
As I wrote, the insurance company will not even issue a policy. She can probably find one who will, but who knows how much it will cost. And then if she tries to sell it now, she'll have to declare all of this and won't be able to recoup near the value she bought it for (correct me if I'm wrong here, but who's going to buy an uninsurable house???).
I feel like the people she bought from were shady. She didn't buy from people, she bought from a guy who had registered his name as a corporation. So now I'm wary he did that to protect all his assets because he knew this would blow up in his face.
Frankly, I'm tempted to advise her to just get the hell out of it, but a) she can't because she has an enormous mortgage and b) she won't sell for what she bought for in the current market and c) the house price will be depressed with this 9/15 year claim record if it even sells at all.
So the only thing left seems to be to go after this guy/corporation.
I don't even know where to start.
Advice please?
This is in Canada, but I imagine legal precedents are fairly transferable.
Best advice is to consult with an attorney, particularly one versed in Canadian real estate laws.
Agreed. Each state in the US has a different way of dealing with claims as well as a different set of disclosure laws. You need to have a local attorney who knows what the seller's requirements are for disclosure.
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