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Updated over 6 years ago on . Most recent reply

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18
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Tim Wang
  • New to Real Estate
  • Austin, TX
7
Votes |
18
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Undisclosed Foundation Issue by Seller

Tim Wang
  • New to Real Estate
  • Austin, TX
Posted
Aspiring real estate investor here. Decided to take the plunge a few months ago with my first rental property and boy did I jump in the deep end. Looking for recommendations for real estate attorneys in Austin, TX and seeking advice from any one who has had experience with fraudulent seller disclosure. Thanks BP.

Most Popular Reply

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184
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229
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Alex G.
  • Investor
  • Austin, TX
229
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184
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Alex G.
  • Investor
  • Austin, TX
Replied

@Tim Wang I assume you didn't see obvious signs of foundation settlements when you did your own walk-through inspection. These are cracks on the ceiling, walls, cracks from corners of the doorways or windows, exterior cracks on a brick or on the slab near ground. You can also notice changes in level of the flooring as you walk around the house from room to room. These would be the very first things one should deliberately look for during a walk-through.

I also assume your inspector didn't notice or reported any of these issues during a formal building inspection. If these signs are unnoticeable to your eye or even a trained eye of the inspector - chances are either (a) the owner didn't know about the settlements through his own findings or reports by other parties, or (b) seller did know about the settlement but failed to disclosure in the SD.

Keep in mind, seller is only mandated by law to disclose the conditions he knows about. Therefore, in (a) above seller wouldn't be violating any laws by not disclosing the settlements, and you wouldn't have any recourse. Seller would be in violation of the law if he omited the settlement info knowingly. And you'd be entitled to certain legal remedies.

If you are certain there are settlements and that seller knowingly omited that info - the first thing to do is to ascertain the cost of repairs. You'd want to get estimates from 3 foundation companies. Then you'd have something to negotiate with the seller. 

Also keep in mind,  in order to give you a warranty on foundation work the foundation company WILL require that you pass the hydro static water pressure test, after they complete the work. This makes sure you don't have any plumbing leaks under the slab that will cause eventual soil and slab movement and cause further foundation damages. 

You have to negotiate your settlement with the seller to include potential plumbing repairs under the slab , if you got leaky plumbing. This is quite common in Austin properties built prior to 80s when cast-iron plumbing lines were common. This plumbing work is quite an expensive proposition that could run $10,000-20,000 by itself.

This is quite common in Austin properties built prior to 80s when cast-iron plumbing lines were used. See the pic of the sewer lines I just replaced on my rehab. The pipes have completely deteriorated and some rusted inside. This is cast-iron plumbing in a 1960 built house in N. Austin. 

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