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Buying or Selling a Home/No disclosure of septic tank


Good morning.

I purchased a house a year ago and decided to turn the home into an assisted care home. I received plans and permits to release a licensed 7 bed home certificate and stamped. During the 6 months of renovation after the sprinkler systems were in and the fire department certified the release for occupancy I had gone to finalize the final inspection with the city. The city pointed out that I would have to verify the "Septic tank" would be big enough for the addition of the home prior to me buying it and to be able to handle 7 people in the home. I had never been disclosed of a septic tank. No certificate was transferred prior to closing per state regulations. Therefor I had not transferred the certificate in my name after an inspection would have been required prior transfer by the seller. I was so over whelmed I decided I need to resend the sale. Is this something I can do? I am sitting on nearly 4,000 a month with delays after delays due to his lack of disclosures on the property. He was such in a hurry to close within 3 days we didn't even have time for an inspector so he can't even blame an inspector missing it. Thoughts please.

OK, so there are many questions here in your statement.   I will try to break them down.

First though, you should know that what you want to do here is a LEGAL question, not a real estate question, although I can help show you where you need to focus this time and next.  All though many of the laws are similar across states, you have not mentioned what state you are in, so each state may have some differences in how the laws work.  

First things first.

1) No disclosure of septic tank.  Who represented you during the purchase?  Did you represent yourself? Did you have a buyer agent?  Did your agent also represent the seller?  Material things need to be disclosed.  It is unlikely - but possible - that no disclosed to you it was septic.  

2) No sewer fees: Are you paying sewer fees?  If you are paying sewer fees, than you don't have a septic system, in all likelihood.  If you are not paying sewer fees, that was your first clue that you have a septic system. Everyone has to get rid of waste, and everyone pays for it.  You share some responsibility for not figuring this out before you pulled permits.

3) No inspection: It is your obligation to negotiate for an inspection.  The seller's timeline is IRRELEVANT.  Unless you are qualified to do an inspection yourself, waiving your right to an inspection was a HUGE mistake.  Your e-mail implies that you bought the house in 3 days, which means you paid cash.  If you pay cash, you can close without a state certification, in most states.  It is the BANKS that require the certification, not the process.

4) Contractor: Was your contractor licensed?  Did you do the work yourself?  Most contractors would know that if you increase the bedrooms, you'll need to increase the septic size.  Legally, this probably is not his fault, but if you did the work yourself, this is one of the risks of doing that.  It is especially important to be VERY CAREFUL when changing the usage of the property - from Residential to a Business - even though in this case assisted living is usually an allowable usage.

5) Rescinding the sale: Generally, this is not something you can do in real estate, except in the most extreme of circumstances, which don't apply here. But you'll need to retain a legal opinion to be sure.

6) Holding the seller or their agent accountable, or holding your buyer agent accountable: This is possible only if they have deliberately withheld that they knew it was septic (in most states). In Massachusetts, if you dealt with the seller directly, the seller is under NO OBLIGATION to disclose ANYTHING, so it is important to understand who is legally obligated to disclose material information in your state.  If it was a bank sale, or estate sale, it is entirely possible that nobody knew (although a good agent should have checked).  If you were deliberately deceived, you could be entitled to damages - but I would think they would be modest - perhaps 10,000-20,000, but no more, and you would have to sue to get it, which will take months.

Unfortunately, I hear about these experiences often.  This is why I, and others, encourage people to think carefully about what choices they make in real estate.  A knowledgeable buyer agent who knows the local area is not "optional", especially if the buyer is not very experienced.  Getting licensed and insured contractors to make sure the work will be done right, and fast, and not get held up by the town is also important.  Lastly, do not expect City Authorities, Sellers, or anyone else to offer much sympathy when you are responsible to do your homework, not them.  Unfortunately, your story will join the many stories of folks who made assumptions about the how real estate works in this country.

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Matt Heisler


I can answer questions about buying or selling your home, and questions about the market in Massachusetts, with detailed answers if you ask about my specific area in Mass, Metrowest. I can help with Investment property and the basics of financing. How to construct deals and how to find bargains and how to protect capital. Land, home sales, rehabs, fix and flips, income property are places where I could be able to assist you. I can also answer basic questions about foreclosure, short-sales, 1031 exchanges, and basic questions about how the economy and credit markets are functioning and how that affects you.


My company sells residential real estate in Metrowest, and we have had a been selling real estate in the area for 20 years. My Blog can be read at Real Estate Sales in Massachusetts

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