Question for the attorneys - real estate fraud?

Discussion in 'Off-Topic Discussions' started by Carl_Reginstein, Aug 23, 2005.

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  1. I just bought a house (in May 2005) in WV that has a crawl space under it. The house is brand new. There was some water in the crawl space area, but it was spring and the builder said "it would dry up". The building inspector noticed the water, said we should "take care of it", but didn't really find much else.

    We purchased the house, and the water in the crawl space has never dried up! We had a basement/crawlspace waterproofing contractor over who found several springs under the house, including several in the INTERIOR of the crawl space (i.e., not along the walls), therefore the water will NEVER dry up on its own.

    I'm thinking of going after the builder - who did not provide either a property condition report or agree to work with us on the inspection. Since we purchased the house anyway, do I have a leg to stand on after being in there 3 - 4 months without complaining or attempting to fix the problem??

    Personally, I feel the builder misled me, and the inspector didn't do a thorough job for us. It will cost about $5,000 to fix the problem and drain the water out with drain tile, pipes, and pumps.

    If I go after the builder, we might never get our money or will spend more than it is worth for the satisfaction of defeating the guy in court - only to find an unenforceable judgment against him as the end result. Guess there aren't debtor prisons anymore, so I'm not sure what happens if you get a successful judgment and the guy just won't pay anyway....
     
  2. decimon

    decimon Well-Known Member

    I don't know about in Byrdland but in New York you can't deceive in hiding known problems.

    That water may never dry but it can freeze and frozen water can crack stone.

    Just my opinion but you should pay for a consultation with a lawyer specializing in real property. If your house is one in a developement then you might also inquire of neighbors any similar problems.
     
  3. DesElms

    DesElms New Member

    Those are two different issues. Forget the inspector for now. That was an arrangement between you and him and whether he did a good job for you has nothing to do with your relationship with the builder/seller.

    In most states, sellers may not mislead, and you may have certain rights of redress if you can prove that he did in any meaninful way that has resulted in harm to you. If your home was purchased not from another homeowner, but was purchased new, directly from a builder, then you probably have certain warranty rights as well.

    You may well have a cause of action with regard to the seller's failure to adequately disclose. Or not. "Adequately" may be the operative word. Your state's disclosure laws -- if it even has any -- may say that the seller's mere listing of the property's underground springs on the disclosure statement was adequate; and that no further discussion or concern about severity (as long as whatever it is, no matter how severe or inconsequential, is listed) is allowed. It just depends on how the state's laws are written.

    So, you really need to consult with an attorney who completely understands the ins and outs of these matters in your state. You may very well get good news, but be prepared for the worst.

    Be sure to explore both the disclosure angle, and the warranty angle, as well as any additional angles which s/he may offer. Whatever are the consultation costs with the lawyer (within reason, of course) will be money well spent. And don't be afraid to get a second opinion. That, too, will be money well spent.

    That is always the concern with lawsuits. I've won many lawsuits, only to discover, after doing a painfully objective post-suit cost/benefit analysis, that it wasn't worth my time, all things considered. It is very important that you take the time to figure out where is your threshold of pain.

    Well, it's not as simple as that. Once a judgement is entered against a defendant, said defendant is given a period of time to pay it -- usually 30 to 90 days. Thereafter, if unpaid, the winner of the suit (the plaintiff) may return to court and begin what's called "proceedings supplemental" (as in proceedings that are supplemental to the original lawsuit proceedings).

    In said proceedings, you tell the judge that here you stand with this judgement against the defendant, yet he hasn't paid; and then you ask the judge to help you collect. The judge then issues an order to the defendant requiring him to fully disclose, under penalty of perjury, all of his assets and their location, the location of his banks and how much money is in each of his accounts (and the account numbers), his income and its sources, etc., etc. Then the judge figures out how to convert which parts of the defendant's assets into your assets and how quickly; and then he begins issuing orders to make it happen.

    Usually, with individuals, it's simply a brick (a garnishment) on the defendant's check... that is, if they're employed; or if it's a business, the judge can order that a cashier's check equalling the amount owed be cut from the defendant's account(s) and given to you; or it could order that a disinterested third party be appointed (for whose services the defendant must pay) through whom all of the defendant's income must pass on its way to the defendant's bank so that the disinterested third party can take a percentage of it and apply it to the satisfaction of your judgement until finally paid. And there are many other approaches.

    If the builder/defendant is in dire financial straights, then sometime after your file your proceedings supplemental motion, but before any of his assets actually get converted to yours, he's likely to bring your proceedings to a grinding halt by filing bandruptcy. If so, then that's when your life, as one of his creditors, will really begin to suck! And you'll begin to wish you'd never been born... trust me.

    If he's a licensed contractor who's doing everything he's supposed to be doing, he quite likely has insurance that will cover whatever amount the court orders him to pay you. But, if so, then he'll likely also have his insurance company's lawyers on his side helping him fight your attempts to get a judgement against him. At that point, any illusions you had of not having to pay your lawyer too awfully much in order to win will go right out the window.

    Of course, all of this assumes you'd actually win... which I say is not something you should assume just yet, no matter how right you believe you are, and/or how wrong you believe he is. Getting from where you are right now to a court-ordered judgement finally landing in your pocket is quite likely a two to five year undertaking, the cost of which (in both actual cash outlay, as well as your time, energy, opportunity costs, sanity, etc.) will likely far exceed what you'd ever win.

    Or not. It good go more smoothly and I'm predicting, or much worse. You simply won't begin to know until you've met with a lawyer and laid it all out for him/her; and then, even more importantly, s/he has laid it all out for you. Until you have that meeting, assume almost nothing.

    I'll say this much, though: If it's true that $5,000 spent by you on a little digging, and tiles, and pumps (and whatever else it will take to remedy the problem) will do it, ten you might want to consider just spending that money to fix it and be done with it. Any decent attorney will want a minimum of $3,000 to $5,000 (or quite possibly more) as a retainer to begin this project... and will likely use that up quickly. Around about the second or third $5,000 check you write to him/her; and after you've lived through the hell of depositions and court appearances and whatever else for a couple years -- and still with no results -- you'll likely look back on the $5,000 it would have taken to just fix the problem in the first place as mere chump change. Or so it is my opinion.

    Oh, sure, if you win you might be able to get the court to order that the builder/defendant must pay your attorney fees and court costs... or you might not. Your jurisdiction might not allow for such things in a case such as yours. Again, you'd need to consult with an attorney to learn these things... and to strategize.

    On the other hand, if $5,000 is really all it would take, and if you're dead set on trying to get it from the builder, you might want to check and see what your local small claims court's upper claim limit is. If it's $5,000 or or more, then you might be able to just sue the bastard yourself and skip the lawyer (except, obviously, for general advice and counsel) altogether. And if you win there and the builder doesn't pay, you may still be able to avail yourself of some kind of proceedings supplemental there.

    But even if you do this, you really should consult with an attorney to find out what your options are and how s/he might be able to help you even if you avail yourself of the small claims court option.

    There may also be a fairly sophisticated and well-functioning procedure in your state for complaining about builders/sellers who behave as you say yours is behaving. You might want to make sure that something like that doesn't already exist through some governmental or non-profit agency before consulting (or in addition to consulting with) with an attorney.

    My former employer, NOLO.COM, publishes several books which you may find useful; and, in fact, there is even a question answered on its web site which is not exactly the same as yours, but which is similar enough that it may provide you with a place to begin your search for answers and/or publications that may be of service to you. To see said question and its answer, as well as to see links to other articles there that discuss the very things we've been talking about in this thread, please click here.

    I hope that helps! Good luck.
     
  4. little fauss

    little fauss New Member

    What kind of warranty did you get? Was this just purchased as is? That would be extremely unusual for a new house. Look at your warranty, this may be open-and-shut.

    But even if you purchased it "AS IS", that's still of no measure in most states, as a seller has a duty to disclose what they knew or should've known about, and the law is typically particularly nasty on builders in most states--and I mean draconian! If your state is at least up to the last century (if not this one) in its statutes dealing with a seller's obligations, then I'd say you have a very strong case.

    Three to four months is nothing. Your state probably has a statute of limitations on bringing the action from 2 to 6 years from the time that you knew or should've known there was a problem (but check this with an attorney or check it yourself through artful googling).

    As I said, in most states, the builder has a much higher obligation than a mere private seller. Most states--or so I think--automatically imply a warranty for a builder-seller; they have no choice.

    I had a private client earlier this year who sold a 100 year old house to what I truly believe to this day were perfectly awful and dishonest buyers. I think they just replaced whatever they wanted with top-of-the-line items--even though they knew the systems were older and this was disclosed fully and obvious upon the most cursory of inspections--then blamed the sellers if anything was older than they preferred after the sale was consummated. They then sought to reimburse themselves through litigation, irregardless of the fact that they knew full well they were purchasing an old house with old (but operational) systems and had paid a much lower price accordingly. They wanted to have their cake (cheap old house) and eat it too (nice shiny new systems all around, but paid for at seller's expense).

    The more I looked into the facts, the more I was convinced that the sellers were being taken for a ride by some very unethical buyers. But alas, the more I looked into the law, the nastier it looked for my clients. I finally recommended that they just settle this one out of court, because the case law was tilting so out of balance in favor of the buyers, even an honest seller would be lucky to emerge unscathed. So they settled out-of-court for thousands, and went on their not-so-merry way.

    Think I'm still a little too emotionally involved in this one? The Jews have an old saying: "May you be cursed with a lawsuit in which you know you are right."

    So the moral of the story is, you probably should be able to kick some derierre. As for collecting, I have three questions:

    1) Does the contractor have any property? If yes, then get a judgment, and go get a lien on that property.

    2). Does your state have a contractor's recovery fund or something of the sort that allows buyers to collect something from a fund into which all licensed contractors or builders must pay if they get stiffed by a judgment proof builder?

    3). Doesn't that contractor have a license? If they won't work with you and take care of you, then contact the authorities. The attorney general's office, the agency that grants them their license, etc. Often works like a charm. One of my clients, who knows nothing about the law but is a better lawyer than me because she's the most tenacious person I've ever met in my life (save for my wife when she pursued me when we were both teens back in the bad hair 80s--but of course, who can blame her? I was quite the catch) went after an unethical contractor when they refused to make good a remodeling job gone bad and after going through several different agencies, ended up costing the contractor legal fees and ultimately theor license. They went out of business and are no more (though allegedly they've started back up under new name--and she'll probably go after them all over again now).

    Anyway, Carl, you have a lot more on your side than you think. And if all else fails, just sic the Exalted Cyclops (er, I mean senior Senator) from your state on them. That old fella loves to stand up for the little guys in his state. I think we once even went around about that. Might as well put it to your use. Good ol' Bird will get 'em.
     
    Last edited by a moderator: Aug 23, 2005
  5. nosborne48

    nosborne48 Well-Known Member

    I disagree with DesElms and my learned colleague little fauss on one small point:

    That inspector might very well be liable.

    You aren't talking here about a government inspection; you're talking about the independent inspector that your lender required, right?

    Another thing; don't let the grass grow under your feet. DEMAND satisfaction IN WRITING and do it TOMORROW. Give the contractor and the inspection company a fixed time limit and STICK TO IT. Remember, YOU don't care who makes it good. Let THEM fight it out between themselves.

    If satisfactory arrangements aren't made, SUE. And I mean RIGHT NOW.

    Finally, DO NOT DO THIS YOURSELF!! This is not a small claims court pro se kind of thing. You are talking about preserving the value of what is certainly one of the largest investments in your lifetime.

    SPEND THE MONEY FOR A LAWYER. Consult the lawyer TOMORROW.
     
  6. Mr. Engineer

    Mr. Engineer member

    Interesting thread

    I am not a lawyer so I can only give my opinion from personal experience.

    My sister in law sued because she found her house sloping to one side. Upon furthur inspection, the former owner (who just happened to be a cement contractor) had cut of the beams underneath of the house in half, and put a jack up to temporarily "level" the house. There was also standing water underneath of the home. As it turns out the former owner lied as he didn't disclose. The sellers agent lied because they live in the same neighborhood and had simular problems with their house and probably knew about my sisters in laws home. After 45K and 3 years, the court ruled that the previous owner was 30% liable and the RE agent was 70% liable. Unfortunatly the previous owner was bankrupt by this time - so deep pockets they way they are, summary judgement for $750K. Stupid agents only had $500K in insurance. It was great seeing the POS crapola morons have to pay out of their own pockets. Nothing makes someone really understand ethics when they have to actually pay themselves.

    As it turns out, about 1/2 of the homes in the neighborhood had foundation problems due to a natural spring. The city signed off that the builder had driven pylons 10 feet into the ground, but upon inspection, the average was only driven in 3 feet. (payola?? -- lol) I am 100% convinced that city building inspectors exist for 1 reason and 1 reason only: To collect revenue. They don't provide for any amount of safety and conformity as I can point out at least 10 homes that have serious defects that were supposedly "inspected".

    Oh- the inspector wasn't deemed liable in this case but he had to pay his own lawyer costs.
     
  7. Mr. Engineer

    Mr. Engineer member

    Best advice yet
     
  8. little fauss

    little fauss New Member

    I agree with my learned online colleague on this.

    But remember this: the law's likely in your favor per my previous post, and a good lawyer who has experience in this area (that's important also, and don't be afraid to ask pointedly and discard attorneys accordingly) will likely get this settled very favorably in your favor. I know, I experienced it from the other side.
     
  9. DesElms

    DesElms New Member

    Well, Carl... if there's one thing that everyone in this thread agrees on, it's SEE A LAWYER and don't rely on anything you read here. Part of the reason is that it eliminates agonizing over precisely what I'm guessing you're agonizing over right about now: Who's right. Well, if you think about it, everyone is with the most important piece of advice that you see an lawyer about it soon. But the much bigger reason to do so is that you need an expert in your state's laws regarding these matters. No one in this thread has consulted the statutes in your state. And that's what matters most.

    Some states can be remarkably backward. As I recall, you recently moved to one of the most backward of the bunch... hence the reason I warned that it may not be as cut-and-dried as some might think; and why I cautioned you to prepare for the worst. It would be wonderful if your state had laws which protect the home buyer in the same way that California's laws protect its home buyers. If we knew that were the case, then little fauss's and nosborne's optimism would be justified. And who knows... it might turn out that your state's statutes are more advanced than I'm worrying, in which case my cloudy forecast was unnecessary and little fauss's and nosborne's optimism would be justified. Naturally, I'm hoping for the latter!!!

    But whenever a builder -- who, no doubt, knows how things work in his state and what he can get away with -- behaves so blatantly, it always makes me worry if he knows something that I don't know. It's one thing if a homeowner/seller tries to pull a fast one. Lots of idiot sellers try that and learn the hard way that the laws which protect homeowners are serious, and the consequences for lying dire. But this guy's a builder. He knows what he can get away with... and unless he's just stupid, he apparently thought he could get away with this. This gives me pause. Maybe he is just plain stupid, and arrogant, and maybe you're gonna' (with the help of your lawyer) teach him the lesson of his career. Or maybe not. And that "maybe not" part is the only reason I was not as optimistic as little fauss and nosborne.

    The bottom line is: SEE A LAWYER, as everyone here has advised (and as nosborne has advised, rightly, that you not only do, but do quckly... which seems like excellent advice to me), and let said lawyer educate you in what is and isn't possible in your state. We are, as I'm sure you know, hoping that you'll be able to make this builder wish he'd never been born. But the reality of the world is that sometimes the dragon wins... which you, of all people (what with your life experience and all), don't need to be told, I'm sure.

    I reiterate my "good luck" wish to you.
     
  10. DesElms

    DesElms New Member

    And... oh, yeah... don't forget to do the cost/benefit analysis. You may have rights that will help you make that builder wish he'd never met you, but if it costs too much to exercise them, then it's of no value to you. If you're correct (and, see, there's the rub) that only $5,000 in digging, tiles, pumps, etc., will completely remedy the problem, then you need to think long and hard about whether you want to give that $5,000 to a lawyer (as a retainer) instead of just fixing the problem and then just trying to collect that money back from the builder in small claims court.

    Also, nosborne's advice that the home inspector and the party whose interests s/he represented might be a good approach is sage. I didn't even look at it that way... which is why he, and not I, gets the big bucks at moments like this. But, again, YOUR LAWYER is the best person to advise you how to proceed. And you ain't gonna' find a lawyer here. Get that phone book open and make that appointment!

    Hope it all works out.

    Ya know... you could always go into the bottled spring water business. At least you wouldn't have to drive far to work.

    :rolleyes:
     
  11. nosborne48

    nosborne48 Well-Known Member

    Big bucks? Big bucks? Where?
     
  12. Abner

    Abner Well-Known Member

    Yes, I must agree with Mr. DesElms and Nosborne on this. Having bought and sold a few properties, always take the lead!

    Abner :)
     
  13. Hatfields & McCoys - the law in WV

    Thanks everyone for replying! Of course, we already knew we needed to talk to our own lawyer in the area - given local "conditions" in WV.... HA!

    Long and short of it is..... there really is no law here. We could sue the guy, if we can even determine where said builder lives now. If we get a judgment, we'd spend $10 to every $1 we collect IF we can collect from this deadbeat. To make matters worse, our builder already is a leading suspect in vandalism in our neighborhood against his FORMER neighbors that he was feuding with. He apparently "visits" his former neighbors sometimes in the middle of the night and dumps oil-based white paint on their asphalt driveways to show his manhood.

    So.... rather than have a revenge driven shotgun blast by this jerk through our 12' tall Anderson windows (which he did install correctly) in the middle of the night, we'll probably just quietly pay for the work and let the cretin slip off the hook.

    Then again, I've only been here 3 months and am already thinking of starting my own version of the Hatfield and McCoy feud, and would certainly have help in my neighborhood should we decide to form our own gun-toting and dynamite armed posse against the guy.... KIDDING!

    Or maybe not, as the case may be.....
     
    Last edited by a moderator: Aug 23, 2005
  14. decimon

    decimon Well-Known Member

    Re: Hatfields & McCoys - the law in WV

    Hope things turn out better than you're expecting. In any event, keep your powder dry and good luck.
     
  15. DesElms

    DesElms New Member

    He's like a prairie dog. ;)
     

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