Expert: liznarr - 6/27/2007

Question
QUESTION: Hello, I just read one of your previous questions, Public: sewer vs. septic, I completely relate..we just foudn out the same thing BUT we know we would NOT have purchased this house if we knew it was on septic.  We bought it in 2004, we are on public water so we do get a bill, never realized sewer was not added on it.  We went to put in a pool and village wouldn't give me permit becuase of our septic tank (which they were right, we do have).  We can not be tied into a public sewer system either.  Our whole yard is either tank, or septic field.  Pipes are everywhere, under our garage, shed, playground area, trees on top, etc.  We cant put up a deck or pool or anything for that matter.  While a septic company was out to locate everything, the water people came to mark their lines..they could not find the shut off valve to the public water line, THEY finally found it UNDER the huge CONCRETE driveway (which the previous owners, or previous owners to them had poured WITHOUT a permit).  Now we have to dig up the concrete slab to get to the valve, it is truly a mess not to say EXPENSIVE. I know you are not from the Illinois area, but I was just curious what legal rights we have?  What kind of compensation can we even ask or expect? We love the actual house, the actual location, but not to be able to make our yard our sanctuary (as planned) and to deal with the risk of the system having issues and having to destroy a garage floor, etc.  is nothing we want to deal with. Yet we really cant afford to move nor can we afford the costs we our incurring now to pump out septic, put riser on tanks, and get to water vavle. Thanks for any advice and knowledge you can give.

ANSWER: Hi Regina,

I am sorry to learn of your dilemma.  Yours is one similar to others I have heard before, and my heart goes out to you.

I would suggest that you contact a good trial attorney for legal advice, but I am going to give you some ideas below.

If the Seller you purchased “from” knew about this condition and did not disclose it, he committed FRAUD (intentional misrepresentation by simple definition).  If you can PROVE fraud, you would probably have a strong case to recover damages from the former Seller/Owner.  If the Seller you purchased from truly did not know, but the previous owner/seller knew and did not disclose, this is an attorney question as far as recovering back in the chain of ownership.  You may also want to review your title insurance policy to see if this event would be covered under that.

You will have to do some homework first.  Go back and review all your paperwork at time of purchase and see if you can locate any documents that state the property is on public sewer.  For starters, check any disclosure forms provided to you by the Seller and/or listing company; MLS printouts for the property (MLS services maintain these records for years if you do not have a copy); any home inspection reports that were provided to you; and any plats that were provided you.

You can talk with neighbors if you need to fill in some missing blanks.  There is usually a busy-body in every neighborhood who will gladly volunteer any information they know, and you just have to find the busy-body.  If the septic system ever gave a former owner any problem, was it ever pumped out?  And what company pumped it out?

If you can locate a plat provided you at time of purchase, this should show any easement areas on the property for public sewer.  If there are none shown, then one should be able to conclude that there is no public sewer and, therefore, no necessity to record an easement for a non-existent sewer easement to be noted.  If sewer easements are shown, but your property had not yet been connected to the sewer, then you need to pursue additional information.

I would try to find out WHO poured the driveway and if this was done by permit and/or if a permit would have been required to pour the driveway.  You can check your County zoning/inspection department for this information.  If a permit was required, it will be “of record,” and you can request a copy.

In view of your comment below ---

‘…we know we would NOT have purchased this house if we knew it was on septic….”

If you had an agent representing you at the time of your purchase, he/she AND his brokerage company could have liability if (1) you had a discussion with your agent about septic versus sewer being of critical importance to you, and (2) your agent did not verify the fact that this property was or was not on a sewer system; then he/she did not perform his due diligence required under Buyer Agency representation and agency laws.

Let’s say that you might have purchased directly from the listing agent of the property who did not represent you.  If you made clear your concerns about septic versus sewer and the agent did not properly disclose the facts to you, he possibly could have liability by not disclosing all material facts to you.

By simple definition, a material fact is any fact or condition that, had you been informed of or known about, would have affected your decision to purchase or not.  Don’t forget that the critical element in recovering damages is being able to PROVE your allegations.  So, do your homework and then contact a GOOD trial attorney in your area if you feel you have a case worth pursuing.  

I hope the above is helpful and points you in the right direction.

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

Regards,
Elizabeth  


---------- FOLLOW-UP ----------

QUESTION: Thank you Elizabeth for helping me out.  This is what I do know, the previous owner had it pumped out in April 2003, we purchased in August04 (not in compliance with the law to do it within 6o days of the closing).  It was on file with the company I called out to pump it when I discovered we had a septic.  I have went through all my papers nothing shows or even gives an suggestion of septic.  I have the MLS it states public sewer, the apprasial states public sewer, the plat survey shows neither public or septic, the contract (where we put in our bid and they had disclosures) states public sewer.  I just dont want to waste money going to court if I really have no chance of achieving anything.  Especially since I know the previous owners and our realtor (We are acquiantences and I would not believe they tried to decieve us).  Now the realtor of the seller, she is another story.  So do I have to prove fraud ON PURPOSE, what if it was missed by mistake and no one ever picked up on it (then nothing, right?) Example MLS stated public and everyone went from there?
The previous owner (I asked her the other day) stated the concrete was poured before they moved in 1999.  I will have to check it further, but obviously going after the previous owners will be hard since we a friendly with each other and the previous owner to them is a CHURCH, eeks!!!  I am starting to think I just am stuck.  Anymore advice, with the research I have done so far?
Again thank you for your help..I just dont want to spend more money on a lawyer than I will recover.

Answer
Regina,

The Seller, Seller’s agent (along with the company she works for), and also the closing attorney could have caught this mistake prior to closing.  Closing attorneys in my state will generally pro-rate sewer and water charges at closing; I am assuming the same for your state.  

With closing attorneys having a copy of the Contract, it is their duty to READ the contract and make proper prorations at closing.  Food for thought for you is, Did you pay the closing attorney to represent you?  If so, why was the non-existence of sewer not discovered and brought to your attention when calling for a sewer bill amount to be prorated at closing?  If there was an amount for a sewer proration on your closing HUD, this would present yet another problem.  

If the Seller filled out a disclosure and indicated public sewer, this sounds very questionable in my opinion, now learning in your last writing that the Seller had recently had the SEPTIC system pumped.

In the eyes of the legal system, the Sellers (even though you say they are acquaintances of yours), could have made mistakes, but have you ever heard the phrase, “Ignorance of the law is no excuse?”  So-called “mistakes” keep the wheels of the legal system turning.  Unintentional as they might be sometimes, many times others are hurt financially by the mistakes of those who should have known better -- or because of carelessness.

As an example, a breach of Agency Law in a real estate transaction can be a very serious offense.  There are numerous documented cases of UNINTENTIONAL breach of agency that resulted in huge awards being made.  The fact that someone was wronged unintentionally is no excuse legally.

If the Seller’s agent acted solely on the representations made by the Seller, unless she had any independent knowledge to cause her to doubt anything the Sellers disclosed, my opinion is that she was under no obligation to investigate further any of the Sellers’ responses on the disclosure, i.e., sewer.

As to your question about fraud and/or proving the act was intentional, this would be better addressed by an attorney.

What about your title insurance?  Have you checked that policy to see if you have coverage there?  This would be worth looking into.

If a genuine mistake was made by the Sellers on the disclosure and picked up by everyone else, this is most unfortunate for you.  If the Sellers made a mistake, they should do the honorable thing and rectify it.  You sound like an honorable person, and were the situation reversed, I believe that you would try to do the right thing.  Since the Sellers are acquaintances of yours, don’t you think that they, also, should do the honorable thing?  Think about it.   You should not have to bear the expense of what you explained to me because of their inappropriate disclosure, mistake or not.

You should keep in mind that the purchase of your home was a business decision – and an investment you made – probably the largest single investment ever by you.  Had you found out all that you wrote me about PRIOR to closing, would you have gone ahead and closed ….. just because the Sellers and your agent were acquaintances of yours?  Of course you would not have.

I understand the roles involved here, and it’s not that I am unsympathetic to all parties involved, but business is business is business.  You stated that ‘…we really can’t afford to move nor can we afford the costs we are incurring now to pump out septic, put riser on tanks, and get to water valve….’   More food for thought for you, but have you even considered getting an estimate to correct all these problems and presenting it to the former Sellers and see how they respond?

I can only say that if you make a personal decision to bear all financial responsibility yourself because of a careless mistake of the Sellers who are acquaintances of yours, then that is a personal decision you must make and ultimately pay for.

At bare minimum, I would still advise you to speak with a good trial attorney and be guided accordingly.  There are obviously still a lot of details that I am not aware of, and an attorney should be consulted as quickly as possible so that at least you will know what your options are.  Possibly an attorney could take your case on a contingency basis and split any settlement with you on a percentage basis, with no money having to be advanced.  In this way, if an attorney does not collect for you, neither will he collect for himself.

Good luck to you, and I hope you have a successful resolution.

Regards,
Elizabeth