A question for RE Attorneys and/or agents (department, title insurance, agreement)

[willbo1]

I bought my home a little less than 2 years ago. The previous owners renovated but never lived in the house, your basic 'buy and flip'.

I am now selling the home as I need to relocate. My listing agent just notified me that they have pulled all the records for the home on file with the city and that there are some open permits that the previous owners never had completed. From what my agent said, they applied for and were granted the permits but never had the work inspected and permits closed out. My agent also said that they are required to detail any open permits on the property diclosure statement.

My question, does the fact that the previous owners did not disclose these open permits nullify my purchase agreement with them? Do I have a basis to sue to get my money back and transfer ownership back to them?

Thanks for any input regarding this.

[Racelady88]

Title searches do not look for open permits. You would have had to have requested an open permit search. A permit remains attached to the property. You need to contact an attorney to see what your options are. Is the work done so poorly that you could not have it inspected and get the permit closed?

[austin-steve]

My question, does the fact that the previous owners did not disclose these open permits nullify my purchase agreement with them? Do I have a basis to sue to get my money back and transfer ownership back to them?

You need to establish if the failure to close out the permits constitues a breach of the purchase agreement. Read the purchase agreement and Seller Disclosures and see if there is language pertaining to this situation.

Have you called the city to find out what it would take to close out the permits? It may be no big deal. I'd have the city out to have a look and go from there. I assume you had the property inspected by your own inspector when you purchased it, so any glaring defects or code violations should have turned up then. It may be a matter of a couple of phone calls and a couple of hours of your time. Not worth getting worked up about.

If it ends up costing a significant amount, especially if defects have to be cured, take care of it and then send a 10-day demand letter to the former owner seeking reimbursement for your time and cost. If they don't pay, take it to small claims court.

I'm not an attorney and the above does not constitute legal advise. Call your attorney if starts getting complicated.

[NYtoVT]

Having been in the title insurenace industry for many years in New York, all lenders require a Building Department search in order to disclose those open permits. The lender will NOT lend on any property that has open permits on it. Again, in NY if the permits were not disclosed when you bought, then it becomes your problem to clear them. Every state/municipality is different as to their requirements for closing out permits. My feeling is that if the house was "flipped" there may be a fiar amount of paperwork/cost involved in clearing these permits

[shellytc]

Did you purchase owners title insurance when you purchased the home? If so, I would contact them to see if they can help clear this up.

If you purchased owners title, you would have recieved the binder after closing in the mail. Hopefully, you will remember where you put it : )

shelly