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I am trying to close the purchase of a house in Westchester NY, but I just found out a portion of the footage advertised in the MLS is NOT considered legal space (even though it's finished and a bathroom was added).
I am obviously pissed off. I don't want any additional taxes or for the Bldg dept to force me to tear up the carpeting/heating and bathroom. The least painful scenario is that nobody finds out, but even then, when I resell the house several years later, I cannot in good conscience claim the exaggerated footage.
There is no question the broker knew about the illegality of the portion of space, but he still included such space in the MLS listing.
Does he violate the ethics standards? Do I have any recourse? What can I recover from the agent/seller? Fraud?
I'm not an agent, but as a buyer with some experience I will warn you against purchasing a house that been renovated without proper permits. I'm sure the agents here will give you good advice. Personally I would start by contacting the town code officer and arrange for him/her to get into the house and review the work that was done, and report back to me before I even thought of going to closing. It may be no big deal or you may have a major reno job on your hands.
Did your title company ever pick this up? that there were no proper building permits for the property? I know in some areas if there are not proper building permits and you go to resell there will be an issue with your title. How did you find out that it was not "legal" space?
In regards to the square footage not being accurate, we have a caveat in our MLS system where I am licensed that "all information is believed to be accurate but should not be relied upon without verification. Accuracy of square footage, lot size and other information is not guaranteed"
Did you, yourself, have a buyer's agent representing you?
Elviento, the seller should have disclosed in the property disclosure form that there was an illegal addition. The agent knows nothing about the history of the home, or whether additions are legal.
The listing agent informs the seller in writing to disclose everything about the home, in the property disclosure form, but the listing agent can not do an inspection. She can only point out something that she may see. The disclosure statements are very clear, and in AZ it states "When in Doubt, Disclose".
If the seller did not disclose that an addition was illegal, then you may have a cause of action against him. However, one may not view a property with "closed eyes". (That is a legal term that's used in inspection cases.)
If you saw that there was an addition, then it becomes your duty to inspect further to make sure it was done with the proper permits. This effectively puts part of the responsibility on the seller, and part on you.
In a purchase contract, in Arizona, there is a 10 day due diligence period where the buyer has the opportunity to perform any and all the inspections they desire, including verification of the square footage.
The assessors tax records have the square footage listed. You and your agent should have examined the assessors records prior to making an offer. If that square footage is different from the listed square footage, then you should have had the seller verify the correct information.
If you see there is an addition, then you should have had your agent ask the seller to provide the building permits, and to correct the property disclosure statement to disclose that addition with no permit.
The agent is not an inspector and would be operating outside the scope of their license if they did try to inspect. However, the agent is required to point out things they see which may be a red flag. She should guide and counsel you to have the necessary inspections performed by the proper professionals.
Here are some more questions to help us better understand the situation so we can offer advise:
Did you have your own buyers agent?
If not, did you sign a dual agency agreement with the listing agent?
If not, then were you acting in an unrepresented buyer situation?
Did you have a home inspection performed?
Did you read the property disclosure statement?
If yes, did the seller disclose that the addition was legal?
Was it obvious that there was an addition to the home?
Did the assessors tax records show a different square footage from the mls sheet?
Does the mls sheet have the disclosure to verify all information, that it does not guarantee accuracy?
I don't want any additional taxes or for the Bldg dept to force me to tear up the carpeting/heating and bathroom. The least painful scenario is that nobody finds out, but even then, when I resell the house several years later, I cannot in good conscience claim the exaggerated footage.
Many thanks!!!
It is entirely possible to get a permit after the fact. It could be expensive.
As far as paying taxes on the entire space? Did you not see the property before making an offer? Paying taxes is a small price to pay to have a lifetime of use & resale potential.
I am still waiting for the title report. I don't know whether this broker himself is also on this site so I'd rather not say how I found out, but I did find out...
Re the caveat, I understand these are estimate footages, so if it's 2030 instead of 2080, I am OK with that, but if it's 2200 instead of 3000, I can't see how you could pass the straight face test. I mean, come on!
It's a dual agency relationship here.
Quote:
Originally Posted by AlicynD
Did your title company ever pick this up? that there were no proper building permits for the property? I know in some areas if there are not proper building permits and you go to resell there will be an issue with your title. How did you find out that it was not "legal" space?
In regards to the square footage not being accurate, we have a caveat in our MLS system where I am licensed that "all information is believed to be accurate but should not be relied upon without verification. Accuracy of square footage, lot size and other information is not guaranteed"
Did you, yourself, have a buyer's agent representing you?
That's the problem -- it could be expensive. I did see the property before making an offer. I am OK with taxes but if too high, it messes up my math. I.e., $10K tax a year is not a problem, but $15K is kinda high for me.
Quote:
Originally Posted by 2bindenver
It is entirely possible to get a permit after the fact. It could be expensive.
As far as paying taxes on the entire space? Did you not see the property before making an offer? Paying taxes is a small price to pay to have a lifetime of use & resale potential.
Thanks for that answer, now if you can answer the other questions we may be better able to help you.
I do not doubt what you are saying, however since you are making a very serious accusation against an agent for lying and fraud, you do need to provide the details that support the allegation.
If you elect to take action against this seller and/or agent, then these and more questions will be asked of you later.
Did you have a home inspection performed?
Did you read the property disclosure statement?
If yes, did the seller disclose that the addition was legal?
Was it obvious that there was an addition to the home?
Did the assessors tax records show a different square footage from the mls sheet? That would have been a red flag.
Does the mls sheet have the disclosure to verify all information, that it does not guarantee accuracy?
Did the agent make any statement to you about the addition?
Again, these questions are just so we can see exactly what the seller and/or agent did wrong.
Captain -- thank you for the input. The seller told me that she told the broker about the illegality of that space, so I know for a fact that the agent was lying to me. We are still in the middle of the diligence process. I do believe I have the right to get out of the contract if necessary, but the time, energy, expenses and aggravation really gets to me at this point.
Pls be assured, I am in no way implying anything about all brokers as a profession. I am just dealing with this particular broker. In fact, of the 3 real estate transactions I have been part of, all involve exaggeration of footage by at least 15%. I suppose I am especially unlucky.
Thanks for that answer, now if you can answer the other questions we may be better able to help you.
I do not doubt what you are saying, however since you are making a very serious accusation against an agent for lying and fraud, you do need to provide the details that support the allegation.
If you elect to take action against this seller and/or agent, then these and more questions will be asked of you later.
Did you have a home inspection performed?
Did you read the property disclosure statement?
If yes, did the seller disclose that the addition was legal?
Was it obvious that there was an addition to the home?
Did the assessors tax records show a different square footage from the mls sheet? That would have been a red flag.
Does the mls sheet have the disclosure to verify all information, that it does not guarantee accuracy?
Did the agent make any statement to you about the addition?
Again, these questions are just so we can see exactly what the seller and/or agent did wrong.
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