All Forum Posts by: David Dachtera

This is not my first time finding out that a property I had UC had too many deferred conditions. But it's the first time I'm not getting my earnest money back.

The sellers accused me of acting in bad faith. However, their MLS listing stated the house was a 4-bedroom, and the 4th bedroom was in a partially finished basement, had no door, no light switch, no closet, and egress was not compliant with code. Also the so called bedroom was adjacent to the location of the room with the gas furnace & water heater and AC, and I was told that if the furnace was drawing air from the adjacent "bedroom" it could not be used as a bedroom or "office". I think that's why the entry door was not hung. I'm not sure I could get a building permit to convert this room into a bedroom.

There was only one light switch in the basement located at the bottom of the stairs and it operated both basement ceiling fixtures. (The mechanical room had a ceiling light with a pull chain.) So I should have walked away but now I'm looking at a dead loss of $5K. The property is in a very good well-maintained older location and had a lot of curb appeal. Sellers had done a fair lipstick job on the main and part of the upper floors.

The sellers installed a $50,000 solar array of 12.8 kw, which I also found out was way too much capacity in that location for the sole purpose of lowering the electric bill. The MLS listing also stated that "there would never be an electric bill" but our utility doesn't refund any money, they deduct if from the cost of the other utilities. There is always at least a $17/month basic service fee. So more BS in the MLS listing.

The sellers borrowed the money to pay for the solar array. I was surprised that they were able to borrow the total price. If it had been a leased system I would not have made an offer.

It took the listing agent about 10 days to respond to my requests for the sellers utility bills so i would be able to see how the solar  system performed. She never asked the sellers to provide them, according to my broker.  And there was no other way to learn how the system functioned. This foot dragging made it really difficult to do any realistic cash flow projections.

As an interesting side piece of data, the (currently getting divorced) sellers borrowed the $50K for the solar system, so they owned it, and it went live this February. They separated and moved out in May this year. Prior to that they had installed a beautiful, very expensive xeriscape landscape front and back, which is a joy to look at, and which also must have sapped their finances in addition to a new furnace, new roof, new central AC, and cosmetics in the interior of the house (LVT & tile etc).

I plan to call a few attorneys to try to determine what my liability would be because the sellers have stated their plan to take me to court if I challenge them.

What's your quick opinion, should I avoid the stress of litigation? Do I have a case?  According to my broker, they can't try to get more money out of me than the earnest money. But if I got legal representation and lost I have all kinds of very expensive liability.

I definitely think they snookered me by withholding the truth and the facts of the solar deal they made. 

Thanks much for reading this far. Maybe I should stay out of the market for a while.

@David Dachtera

Lately I’ve been accused twice of insulting people when I ask questions, so right up front. This is not an insult, it’s a real question. 

You say: "Investing" for appreciation is NOT investing, it's speculating (read: gambling).

Are you saying almost all stock investing, which is almost entirely based on appreciation is gambling? I certainly feel that way about bitcoin and probably silver/gold, and at least a little about stocks. It’s always bothered me when people won’t invest in real estate without cash flow but they’ll GLADLY invest in stocks with NEGATIVE cash flow, praying for appreciation.

This is the exact reason I stopped investing in stocks. There was no way I could buy enough stocks to generate enough cash flow to live on. When I retired I didn’t want to “hope I died before I spent all my savings”. That and having zero control over if they went up or down each day or even over time got me to real estate and changed my life. 

Again, honest question and not aimed solely at you. I’d be happy to hear anyone’s opinion, you were just the latest to say it and I thought you might still be online. 

Hello BP community,

I am currently renting a home to a family that has been in my unit for about 3 months.  Since they've moved in there's been numerous complaints about the A/C not cooling to the desired temp and maintaining the temp.  Each time I've addressed the issues by calling an A/C company to come out and check/fix the problem.  (The tenant wants A/C to reach 65-68 in the home.)  Multiple times it has reached the desired temp but struggled to maintain due to various reasons which have been addressed (+its been 100 degrees outside for the past 3 weeks).  After the most recent A/C repair, the home reaches 65-68 consistently but now the tenant is complaining that, although the house is reaching 65-68, the master bedroom and office are not getting to that temp.

Nowhere in the lease does it state that the temp must reach 65-68. but I have an e-mail response to the tenant before they moved in where they asked, "due to wife's medical condition, temp needs to be kept around 65-68, will A/C be sufficient to accommodate this?"  To which I replied, "Yes the AC works fine."   **Before move-in I had an A/C company verify the unit is fully functional and problems started to happen after they began utilizing the system to maximum capacity. 

To "fix" the issue of room temp A/C company said would cost thousands per room to tear into the wall to check the ductwork. To me, this is not an option because the room is just a few degrees warmer than the thermostat.  Instead, I offered to install a mini-split in the bedroom and a ceiling fan in the office. 

They are insisting they would rather be released from the lease without penalty and it wouldn't be "fair" to have to break the lease to the terms.  (Penalty for breaking lease is 60 days notice + additional 2 months rent fee)

I've done everything in my power to accommodate the tenant and diligently had professionals come out each and every time in a timely manner to address the A/C issues, and even offered to add mini-split and ceiling fan but they would still rather me break the lease without penalty.

My theory: They regret renting a 3000sq ft home with high ceilings where the A/C is kept at 65 all day and night in 100-degree weather and got their first couple of electric bills and want to find a way to get out of the 1-year lease without penalties.

1. Based on my actions and my proposal to fix A/C issues, am I legally good to stand my ground and make them abide by the terms of the lease? 

2. Am I even legally obligated to accommodate a mini-split and ceiling fan to the 2 rooms although the house as a whole is reaching the desired temp? 

Thanks for any/all advice.