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Problems with home purchase, home owner’s association, ineffective heating system, annual taxes, statute of limitations on representations in New Mexico
My husband and I are in a situation where we own a house that we would not even have looked at if everything had been properly represented in the MLS; however, it appears to be caused by a chain of errors, rather than anything in which blame can be placed.
In late 2005, we decided we wanted to leave Phoenix (which had gotten too crowded, polluted, etc), and started a house hunt across five states. In the course of the search, we looked at the house we own now in rural New Mexico. The house had been repossessed and was owned by a bank, and was represented by an elderly realtor.
1) One of our conditions was that we would not own a house in an HOA. The house was not listed as being in an HOA. No reasonable person would look at the property and expect it to be in an HOA, as it is the only house in a lightly developed, very rural area with only mobile homes as neighbors. Many neighbors have structures that would be disallowed by any HOA. Weeks later - 10 days before closing, after we had given notice at our jobs and mobilized funds for the closing - it was discovered during the final titling process that there was an HOA.
2) This virtually new house was sold with a functioning, but wholly ineffective, heating system. In fact, we have just discovered that one room in the house is not heated at all.
3) One of the attractive features about the property compared to other properties we had been considering at the time was the very low property taxes, borne out by several years' history of the same. We paid less than $1500/year for property taxes in Phoenix for a house sold for $385K, so it didn't seem strange to us to pay $200/year for a $240K house where there is no public water, sewer system or paved roads. Today, we just received a tax bill from the county which is charging annual taxes of $1400. It turns out that the house had been zoned incorrectly at the time we bought it. (The house had been standing for more than a year.)
I'm not sure whose fault these things are, but I don't believe that they are our fault. Is there any sort of recourse?
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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Check with a NM attorney about statute of limitations on the representations. The heating thing might have been discovered in a home inspection, you should have had one. I think it's probably on you to ask about taxes as well. You may want to check with the Assessor/Tax Collector about the taxes, perhaps there has been more than one mistake.
I was an agent with Coldwell Banker for 4 years, total time as an active agent with different firms: 8 years. I can give you general answers, which do give you good info., but not state-specific, which I do not believe should be an issue here.
1. Since you did receive the HOA disclosure prior to closing, it does not impact your current situation. If, prior to closing, you had "put on the brakes" and challenged the validity of the contract based upon lack of disclosure at that point, you may have been able to get out of the contract (with some/all/none of your deposit...depending on contract terms). But, when you received disclosure and continued to closing, you purchased the property, accepting the fact of the HOA.
2. In most states, this falls under "buyer beware", and is the reason for a thorough home inspection by a licensed inspector. They would have been able to tell you that the obsolesence of the system was near, and you could have, possibly, re-negotiated the sale price/had it replaced/etc. The contract probably has terminology stating the lack of "warranty, implied or otherwise"--or something to that effect.
3. It is SOP that, as a result of a real property transaction, the parcel is re-assessed by the tax appraisor, resulting, often, in higher taxes. Also, at this time, 'glitches' such as zoning, can be found. It's too bad that a real estate attorney wasn't involved (I'm guessing), as they would have hopefully found this deviation in the zoning. Again, when these sorts of cases go to court, it is virtually 100% of the time an outcome of: no recourse, "buyer beware".
I feel for you, as these things happen quite frequently, and the hard way to learn that is when it happens to you!
If you want the advice of an attorney, your Realtor's agency should have a corporate attorney who may be able to check into local ordinances for you. Best of luck!
My husband and I are in a situation where we own a house that we would not even have looked at if everything had been properly represented in the MLS; however, it appears to be caused by a chain of errors, rather than anything in which blame can be placed.
In late 2005, we decided we wanted to leave Phoenix (which had gotten too crowded, polluted, etc), and started a house hunt across five states. In the course of the search, we looked at the house we own now in rural New Mexico. The house had been repossessed and was owned by a bank, and was represented by an elderly realtor.
1) One of our conditions was that we would not own a house in an HOA. The house was not listed as being in an HOA. No reasonable person would look at the property and expect it to be in an HOA, as it is the only house in a lightly developed, very rural area with only mobile homes as neighbors. Many neighbors have structures that would be disallowed by any HOA. Weeks later - 10 days before closing, after we had given notice at our jobs and mobilized funds for the closing - it was discovered during the final titling process that there was an HOA.
If you had the opportunity to rescind the contract upon this discovery, but did not, you assumed the "risk of loss" - in other words, you are responsible
Quote:
Originally Posted by NMAZ
2) This virtually new house was sold with a functioning, but wholly ineffective, heating system. In fact, we have just discovered that one room in the house is not heated at all.
You had an opportunity for an inspection - it was a bank repo (REO) - I would hazard a guess that because it was an REO, you signed an "AS IS" addendum with the seller (the bank). You became liable / responsible for this issue
Quote:
Originally Posted by NMAZ
3) One of the attractive features about the property compared to other properties we had been considering at the time was the very low property taxes, borne out by several years' history of the same. We paid less than $1500/year for property taxes in Phoenix for a house sold for $385K, so it didn't seem strange to us to pay $200/year for a $240K house where there is no public water, sewer system or paved roads. Today, we just received a tax bill from the county which is charging annual taxes of $1400. It turns out that the house had been zoned incorrectly at the time we bought it. (The house had been standing for more than a year.)
No one is responsible because the taxes changed - as a property owner, you are responsible for the taxes - and taxes change
Additionally, after 2 years, I doubt seriously you have any recourse because of laches
I know you are in a mess of trouble because of all this
the taxes can't be helped they may have passed a special assessment tax prior to you moving in check with the county tax office
I hope all that read this on the other issues will now understand how important it is to buy a home warranty the only run about $300-$500 but can save you from alot of heartache down the line
most times you can have it so the seller pays for it in the closing costs
1) When we found out about the HOA, we did an 11th-hour search for another property. Knowing that we had cause to exit the contract, we planned to walk away. However, in the ~2 months that had been tied up with the closing process, in a housing market that was still inflating, there were no longer any other comparable properties in the price range. Others that we had been considering at the time we picked this house were long since sold. We did the best we could, getting in writing some concessions that we required, but were extremely angry at the misrepresentation.
It's easy to say now that if I knew then what I know now, we should not have moved. But at the time, staying put was not much of a solution either: we had mobilized funds at a cost of several thousand dollars; we had packed up our house; we had long since given notice at our jobs (I had already trained my replacement). With that as a backdrop, we searched frantically for an alternative, with less than 10 days to find one in a market that had already priced us out of what we were looking for. The house we had a contract on was literally the only house in the five states we were considering that met our minimal requirements.
2) The house is virtually new and had not even been lived in for a year. It appears that incompetent installation of a floor heating system left one room which does not heat no matter which zone you turn on. (Worse, this unheated room is where the thermostat for another zone is located, which is no doubt one reason for the gargantuan bills we experienced.) We spent the first winter making constant corrections and adjustments in the system, thinking that we were just one step from getting the system to work; this season, we discovered the inherent problems and are now looking at having to install a real heater for $4K+. It passed a typical inspection, because the unit turns on and heat is produced. It took an all-day effort on our part to discover the problems - you have to fire up each zone individually and wait several hours to find out what gets warm.
3) The tax bill sent to us a year ago - after we'd owned the house for six months - was $200. This year, with no notice, we got a $1,400 bill. I have investigated and find that the $1,400 is correct; what happened is that it was not until 2007 that the county rezoned the property to reflect a condition that was in place more than a year before the property was sold. (The property was subdivided into lots in the 1990s, and construction began in 2001 - this property has not qualified for the zoning status it had when we bought it for at least 10 years.) The tax situation really upsets us, because frankly, that was the tipping factor in favor of this house vs. others. We would not have chosen to buy a house that we had to pay this kind of property tax in the total absence of even basic infrastructure of civilization.
Last edited by NMAZ; 11-04-2007 at 08:53 AM..
Reason: Added additional info
This virtually new house was sold with a functioning, but wholly ineffective, heating system. In fact, we have just discovered that one room in the house is not heated at all.
Depending on what "virtually new" means, if the heating system was improperly installed, it may still be covered by the builder.
So I take it you don't take work from real estate agents who recommend you Diligent?
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