All Forum Posts by: Brandon Lopez

@Charlie MacPherson Thanks so much for your response!  You're correct - this is not a fun situation at all.  At this point, we're too far into the salon buildout to walk away so we're hoping to recoup as much as we can from the previous owner (either through litigation or trying to negotiate directly with him outside of litigation).  I've been in contact with our closing attorney and a few attorneys on rocketlawyer at the moment, so hopefully I'm taking the right steps as of now.

Again, appreciate your perspective and will keep you updated on how it turns out!

Hello,

Thanks to everyone in advance for the help. I've read several similar threads on this site looking for information, but I haven't really found my answer yet, so please excuse another post on the topic.

I closed on my first commercial/mixed-use property last year, and my wife and I are building out a hair salon in the retail space.  After we closed on the building, we discovered that the sprinkler system already installed was for visual appeal only (a plumbing line was NEVER hooked up and the pipes were made of PVC).  The city now requires us to install a proper sprinkler system throughout the building before they'll allow the salon to open.  Here are a few key bits of info:

• 
  There was no seller disclosure form (which I hear is pretty standard for commercial real estate) stating the sprinkler system was not up to code.  The seller did not otherwise indicate this at any point during the due diligence period.
• The pvc pipes themselves were concealed by a drop ceiling, although sprinkler heads were visible through cutouts.
• The inspector did not identify the issue.  There is a clause in the inspection report stating it's not intended to ensure code enforcement and may be limited if there are concealed areas (does drop ceiling qualify?).
• According to the previous tenant in this building (in writing), the seller was aware the sprinkler system wasn't up to code (though I'm not sure he had it installed as he only owned for 10 years). They had this conversation because the tenant was worried his business could get interrupted if there was ever an inspection (not related to this sale).  According to the same tenant (verbally), the seller mentioned he hoped the drop ceiling would conceal this.
• The cost to install an approved sprinkler system in the building is roughly $50-60k, plus an additional 8-10 weeks before we can open.

Given all of the information above, I'd love to get your opinion on whether or not there might be grounds for legally recovering some or all of the cost of the new sprinkler system?  Thanks again for any thoughts you can provide!

EDIT: Sorry for all of the bullets - could not figure out the list function in the forum!