Legal Question in Real Estate Law in Illinois
My parents recently purchased a foreclosed home in Northern Illinois. My father is a skilled carpenter who was recently relocated. He decided to purchase a forclosure that needed small repairs that he could handle while working his full time job. They found a wonderful home and went over the top with inspections. He asked neighbors about the homes' situation and if there were any known problems. The neighbors said the home was forclosed on due to a bad divorce and the home was given to the wife, who could not keep up payments.
The home was great with one exception, the basement had recently been flooded. The sellers agent told my father it was a sump problem, an easy fix. After dad was convinced this was the case by the agent and another inspector, they signed for the house. During the first night at the home, they were awakened by the sound of rushing water. The spikit (sp) in the front of the house had been cranked at full bore and was going for quite a while. Dad assumed it was a neighborhood kid since subdivision's bus stop is just down the drive way from the house. (He later found out the husband of the divorced lady who had owned the home would stop by the home and turn it on reveling and taking advantage of a problem I have yet to get to). He removed the handle to the spikits to end this problem, however, water kept making its way in. Dad fixed the problems with the current sump and even added another to deal with overflow. This kept the home dry without problem. Before Christmas, my parents traveled back down to visit the family outside of St. Louis. My mother stayed a week and packed up their stuff and dad went back to Illinois to work. When he arrived he noticed tremendous cracks in the home's foundation. He went to work and came home and the cracks had gotten worse.
At this point they are living out of a motel after purchasing the new home. The cracks have spread throughout the house and garage. Dad fears the home is collapsing. After staying up day and night, Dad thinks he has figured out the problem. The home is built two feet below where it should have been. The home has in fact been "floating" on rain and groundwater. When dad upgraded the pumping and drainage systems to fit the problem told to him, he in fact sucked out the water that the home had been resting on. This caused the house to resettle and will most likely lead to the demise of the home. It seems that the realtor and probably the bank knew of this problem. The former owners seem to have left the home for the same reasons, but it did not go as far before they left. Neighbors are now saying they saw multiple contractors and workers at the building (they have not been very helpful with much else except to let them know it may affect their homes, they just want someone to move in so their prop values do better). This problem was never mentioned in any paperwork and was never verbally told to my father. It was actually covered as a sump problem. Shouldn't this have been disclosed before sale? The home has had this problem since it was built, but never showed its full potential until someone tried to fix it. I think the Realtor saw Dad as someone who may be willing to try to fix a small problem and took advantage of the situation to sell a property that had been on his hands for a while. I know the sellers knew about the problem, if not the bank for sure the Realtor had knowledge. Is there anything that my parents can do to fight this? Can they get out from under the contract? My hardworking parents with outstanding credit are staring bankruptcy in the face and it blows me away....
1 Answer from Attorneys
Unfortunately, the Illinois Residential Real Property Disclosure Act does not apply to "Sellers" who have (a) never lived in the place and (b) never managed the place (directly or indirectly) - that could include the lender if your folks got a deed directly from the lender out of foreclosure. If the foreclosed owners were the sellers, then your folks should have received a disclosure form from them or through the broker. So if the lender and/or broker never supplied the typical disclosure form, none many have been required or there may have been a serious omission. If none was required, however, this could have been a totally "caveat emptor" (buyer beware) As-is, where-is, etc. sale. Unless there was some notation in the sale contract about the problem, or there is any kind of proof (other than the broker's verbalized "opinion" that was never reduced to writing) they may be totally out of luck. Now, that having been said, there are legal principles in Illinois about physical condition that "survive" a closing, but again your folks may only be left with a lawsuit for fraud, and with no real proof except one person's word against another. So it may be an impossible situation BUT the first thing that should happen is a trip to the local building department and check and see if there are any records of reported problems with this property, HOWEVER, again, depending on what the contract says, the real problem is that your folks were relying on a broker's word when they should have had a contractor or other professional inspect the property before going under contract, or during an inspection contingency period that may be IN the contract, and having failed to protect themselves, may be out of luck. If there are any records, or if there are not, the next step would be to take everything to an attorney (sale contract, building department records if any, closing documents, etc.) for review for any loophole.
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