Expert: liznarr - 9/10/2008

Question
Hi, I also am in a situation were we purchased a home in October of 2005 and following the close of escrow we were notified by our lender that we needed to obtain Flood Insurance. We were never advised in escrow nor from our lender, sellers agent nor out own real estate agent that we were in that zone. We have viewed all loan papers and there are signatures that show the sellers did sign a disclosure, however we have no papers showing we received nor signed any disclosures. Had we known that we were in the zone we would of never purchased the home. What legal rights do we have since it has almost been 3 years now? Can we sure all parties involved?

Answer
Hi Michelle,

Generally, lenders require “flood certifications” at closing; i.e., a certification from a service specializing in categorizing a property as being either in or outside of a flood zone.  Closing attorneys or title companies usually also give attention to these matters at closing, so I’m not sure why yours did not – unless there was no new survey completed which might have indicated a flood zone.

I would be asking questions both of your closing agent AND the lender as to why this is just now coming up.  In addition, I would be contacting both the agents involved in the transaction and asking VERY pointed questions.  You should also make a written request for a copy of the “disclosure” supposedly signed by the Sellers which you never received a copy of.  

To answer your question of what legal rights you have now is one that needs to be addressed by an attorney, as I am not qualified to give legal advice.  A good attorney can advise you whether or not, if fraud (intentional misrepresentation) was committed by any of the parties, you might be able to rescind the Contract of Sale or take legal action and whether or not any Statute of Limitations applies or either has already passed.

Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth