Legal Question in Real Estate Law in Massachusetts

Re: square footage of a house is smaller than claimed

Hi and Thanks for Writing -

My name is Len Foy and I'm a real estate attorney with Gould & Gould, we have offices in New Hampshire and in Massachusetts. I practice in both states. Our office telephone number is (603) 434-3437, my email address is [email protected].

I think you should speak with your loan officer (the person handling your financing) about the appraisal before you do anything drastic. Appraisers are required to follow very precise industry standards when calculating "gross living space." For instance, I've seen cases with older homes where a finished basement which appeared to be "liveable" by most people's standards could not be included in the "gross living space" for one arbitrary reason or another. I think you'll find, once you've gone over the appraisal with your loan officer, that the appraiser "backed out" some part of the home to comply with commercial guidelines, but you may well consider that disqualified area to be a part of the overall gross living area.

Or, it's possible that the builder simply overstated (or misrepresented) the gross living area - a conversation with your loan officer should help you narrow it down.

As for whether you can cancel the transaction and have your deposit returned, a look at your Offer to Purchase and Purchase & Sales Agreement would give me a better idea, but there are circumstances which allow you to safely withdraw from a real estate agreement, and the discrepancy as to the gross living area may qualify, but I think you'll need more information about that discrepancy.

If you want to fax the purchase & sales agreement to me I'll look at it - my fax number is (603) 434-9578.

You can always send me an email if you'd like to discuss things further.

Regards and Good Luck -

Len Foy

Re: square footage of a house is smaller than claimed

Your legal rights will depend on the exact wording of the Purchase and Sale contract that you signed. Quite often, in new construction, the square footage is described in terms allowing for some "wiggle room." Nevertheless, the critical question is "Do you want the house, as viewed, at this price?" If you liked the house as you originally saw it, and you believe that you are paying a fair price for the house you thought you were getting, then there really is no problem. It is entirely possible that the builder, for example, measured the outside foot print,including a deck; but that the appraiser measured interior rooms, each calling the result "living area." But even if one or the other made an error or misrepresentation, you need to decide if that is material to you.

Your legal remedy, if you decide to pursue it, could be as simple as a demand letter followed by a full refund of your deposit; or, could require litigation in Superior Court (a costly proposition). Your damages would be the difference of the fair market value of the house with and without the disputed square footage, if indeed there is a true difference. Since the appraised value and the offered sale price are virtually the same, I do not see litigation as a cost effective alternative, unless it is necessary to recover your deposit. Also, bear in mind that any litigant must make a good faith effort to mitigate damages, so that consequential damages related to finding other housing may or may not be significant. I would be happy to discuss this in more detail, if you wish. You may contact me directly at [email protected], or 781-861-1848.

Re: square footage of a house is smaller than claimed

Your legal rights will depend on the exact language of the Purchase and Sale contract that you signed. Frequently, in new construction, the square footage area is described in terms allowing for some "variation."

The real question is "Do you want the house, as it is, at the sale price?" There is a possibility that the area quoted by the builder is gross square feet and the appraiser used living space, one might include basement and porch space the other only interior space.

Even if one or the other made an error or misrepresentation, you need to decide if that is material to you. Your legal remedy, if you decide to pursue it, could be as simple as a demand letter followed by a full refund of your deposit; or, could require litigation in Superior Court (a costly proposition).

Your damages would be the difference of the fair market value of the house with and without the disputed square footage, if indeed there is a true difference. Since the appraised value and the offered sale price are by your notes effectively the same, litigation does not appear to be a cost effective alternative, unless it is necessary to recover your deposit. Also, bear in mind that any litigant must make a good faith effort to mitigate damages, so that consequential damages related to finding other housing may or may not be significant. You can contact me by email or telephone if wish to discuss the matter in more detail or have additional questions.