Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The short version is that a client contracted with a home builder to build a $680,000 vacation rental home in Florida. The home was actually constructed on a lot next to the one that the client owns. It appears as if the error dates back to misplaced stakes during the first survey last year. All subsequent plans and draftings were based off of that survey.
The error was not noticed until six months after construction was completed.
I'm curious as what the final outcome will be. If the owner of the land on which the house was built doesn't want to cooperate, things could get very sticky.
I've seen a builder build a house backwards "garage on the left" instead of "garage on the right", before, but never on the wrong lot entirely. I have seen a house be staked out on the wrong lot before, and even start digging the hole, but someone always catches it by about that time. To build the entire house, and close, and go 6 more months is just crazy. I can't even imagine.
I HAVE seen the guys who stake out the lot for digging measure from the wrong pins, and put the house in the wrong spot, sometimes encroaching too close to the actual property line, or even over it, necessitating a lot line adjustment, which falls in the same category, so this sort of thing does happen from time to time.
To me, this means also that the seller didn't get expanded title insurance. I personally think that anyone who closes new construction without expanded title insurance is an idiot. What if the builder dies the day after closing on the house. All those subcontractors who worked on the house for the 30-60 days before closing are going to immediately file liens against the house and you'll have to pay for a good share of the house twice, once to the lender and once to clear the liens.
If they had gotten expanded coverage, the title company should have discovered this prior to closing, since they (at least in my area) walk the property and find the pins and compare to the survey/plat map prior to closing to make sure there aren't any encroachments, etc. If they had done this, they would be involved in the negotiations, as they would be liable, too.
A reminder to anyone who buys a new construction house, make sure you get the right type of title insurance to cover crazy things like this that happen.
Even the backwards can be bad. I have a house in mind where the view, the moneysworth, is one side of the lot...mountains and sunset. The other side, nothing. That can be where the garage goes. Have to watch that build carefully.
I too am surprised it wasn't caught with city inspectors, appraiser or surveyors etc. There are a lot of people at every stage of construction and financing. Not a single person caught it? Wow.
I too am surprised it wasn't caught with city inspectors, appraiser or surveyors etc. There are a lot of people at every stage of construction and financing. Not a single person caught it? Wow.
The builders, city inspectors, appraisers, etc. would have no way of knowing the home was on the wrong lot. It was a 10 lot stretch along a street with no indication of where the lot actually started and ended. The only way of knowing where the lot started and ended, is a properly done survey. When a survey company realized they had improperly placed the stakes, they should have removed them immediately.
It all comes down to the fact, that the survey company screwed up, and their insurance company will be called in to play along with the survey company. The lot owner may be willing to sell the lot, but it will be sold at a much higher price than they paid if it goes as others with similar problems.
There was a small rural mountain resort town in Colorado years ago. A man was building his home on a lot he had purchased, and had it half done before he put in for a construction loan. Problem. Survey found he did not own that lot but the one the house next door was on. Soon as checks were done, they found there had been no surveys in that little settlement of about 50 homes, in decades. Everyone thought they knew where their boundaries were. Wrong. Every single home was on property the owner did not own. Now we have a real mess.
A real estate attorney, advised all the owners go into a class action suite to clear title problems. This would cost a few thousand from each owner. I was brought in as a consultant. I said why not all get together and mark where you think your boundaries are, then have a surveyor make a new plat for the subdivision, and everyone quit claim their deed to a pot, and an attorney would then issue new lot description based on the new survey. Checked with the county recorder and he thought this would be perfect. That is what was done, and it cost a total of $200 a home instead of thousands each.
The situation we are discussing can be solved quickly, if the other lot owner would be willing to just swap lots. Only involve writing two deeds, and filing those deeds. Cheap and easy. But this can get into real problems, if the lot owner demands they home be removed as an example. Or the lot owner just says, "Thanks for the Free House".
Lets hope the survey company has a big insurance policy if such a thing happens. I know most firms have at least a Million Dollar Policy that covers errors and omissions. I know I did when in the real estate business, and most brokers I knew did the same.
The situation we are discussing can be solved quickly, if the other lot owner would be willing to just swap lots. Only involve writing two deeds, and filing those deeds. Cheap and easy. But this can get into real problems, if the lot owner demands they home be removed as an example. Or the lot owner just says, "Thanks for the Free House".
Even if the landowner takes the "hey I got a free house!" attitude, I highly doubt it would actually pan out that way.
Like you said, the easiest solution is to simply switch lots. If the landowner wants to play hardball and take it to court though, he's looking at being in a position of "unjust enrichment". The most likely scenario that I'd put money is that a judge compels a sale of the house or a swapping of lots.
Assuming they cannot work out a deal to switch lots, I wonder if there are any restrictions on the person who contracted the house now building the house they wanted on their own lot. For example, there are subdivisions around here (both new and old) which forbid two of the same model on adjacent lots of even so many houses in a row of the same color. Besides lost income from not having the built on time, there could be problems as they now have to change plans. (Although I would wonder on the lost income part if this wasn't realized until 6 months after the build was completed, sounds like a very absent owner.)
My bad, I missed some of the details at the end that nothing was obvious about this even to the local officials. Wow. I retract my comment about lost income and an absentee owner, it makes more sense now.
This may get hard to resolve there as it also says the owner of the lot the house was built on paid nearly $200k more for their lot years ago than the house owner paid 2 years ago. They may have been holding out building because they were trying to recoup money or because they don't have the money to build. I'm actually surprised in a development like that someone could hold onto a lot for 10+ years without having built on it, around here there is usually a deed restriction requiring it not sit vacant.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
