Buying or Selling a Home/being sued by home buyer

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Question
I recently sold my parents home in Illinois and now I'm being sued by the buyer saying I did not disclose an issue. Heres the history....I am/was Power of attorney on my parents home, my mother had passed away in 2012 and had left the home to my father who is in the early stages of Alzheimer. My father has moved back to his home country of Poland and i was left to take care of the home. After my mothers passing i never went to the home and after one year i couldn't afford keeping the home.  My parents owned the home for about 8 years, when they purchased the home my father had a massive heartattack and stroke, after he somewhat healed but never to full capability to take care of himself, my mother was diagnosed with cancer and soon after passed. Now heres the issue i never stayed in the home and was rarely there cause of the health issues.  I hired a realtor and she told me what needed to be fixed, had them fixed and put the house on the market. House was on the market for less than 24 hours and it sold. we agreed on a price they had their inspection, we fixed the issues that we needed fixed, closed on the home in Oct 2013, now the buyers are saying i never disclosed that the basement leaked.  I never knew of the basement leaking and my parents never said anything about it. The repairmen i hired to put drywall up in the basement to finish the basement never mentioned any water. What recourse do I have? I am being sued for 50,0000.00 does the inspector have any liability in this? I don't know what to do. Any advice you can share is much appreciated. Diane

Answer
Diane,

Sorry for the delay in responding, and sorry also to hear of the loss of your Mother and now your problems after the sale of your parents’ home.

I don’t know about Illinois disclosure laws, but in the State I work, if you were POA for your parents’ home and never lived in it, you could not be held liable for issues that you were obviously unaware of and had no “actual” knowledge of same.

I downloaded and have briefly looked at Form 108 Revised 1/00 (Illinois Association of Realtors Residential Real Property Disclosure Report) and make the following comments:

1.   Were you, as POA for your Father, obligated to fill out this form since you never lived in the property?  You may need to consult with an attorney for the answer to this question.  Your listing agent should also be able to answer this question for you and should have given you some guidance on this form relating to your obligation to disclose, or not, under Illinois law -- or either referred you to an attorney relating to your obligation to disclose.

2.   I note that “Seller” would not include any person who has BOTH (i) never occupied the residential real property AND (ii) never had the management responsibility for the residential real property nor delegated such responsibility for the residential real property to another person or entity.  

You stated you never lived in the home, but it’s the number “ii” above that I don’t have enough information about to comment on.  

Professional home inspections by a buyer, generally, are considered to take precedence over a Seller’s disclosure – because most Sellers are not trained to look for hidden/latent defects, especially any defects a Seller is unaware of.  If the buyers had an inspection done, I would think that their home inspector would have liability for failing to discover and/or disclose water leaks in the basement.  Water leaks are generally obvious by water stains on concrete or flooring and/or any water lines (from standing water) on the walls in the basement.  I would ask the home inspector for a copy of his E&O policy.  

You mentioned hiring repairmen to put drywall in the basement and the fact that they never mentioned water.  I’m sure there are many other details I am unaware of (including when the drywall was installed and why the drywall was installed), but if the repairmen saw any water and/or water damage and did not report this to you, I don’t see how you could be held liable for their non-disclosure to you.  I would suggest  contacting these repairmen and ask them for a notarized statement outlining that there was no water or water damage at the time they did their work, if that is the case.

If you have already been served papers and litigation is in process for the amount of $50,000.00, if you have not already contacted a good trial attorney, I strongly recommend that you do so immediately.

An attorney will be able to answer these disclosure questions for you, since I cannot give you any legal advice.  An attorney will also be able to advise you of your role and whether or not you were the actual SELLER of this property since (I assume) the home was in your Father’s name.

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

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liznarr

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I can answer questions relating to the purchase and/or sale of residential homes and land, including what a really good agent should be expected to do and/or not do; where to turn when problems occur; and questions regarding disclosure. I`m a Licensed Realtor in the Southeast since 1984 with designations of Broker, GRI, CRS, and CBR (Certified Buyer Representative). Current active and Life Member of Million Dollar Club, Certified by State Real Estate Commission to teach Pre-Licensing and Continuing Education courses, specializing in Agency. Currently serving on Grievance and Professional Standards Committees, and Education Committee in past.

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