Legal Question in Real Estate Law in Massachusetts
My wife and I bought a house a week and a half ago. We did a pre-closing walk through and noticed that the furnace was leaking something. We went to the closing and prior to signing we brought the issue up. We were getting and FHA loan. The sellers Real Estate Agent and the Mortgage Lender both went to the property and verified the leak and informed the sellers attorney, who was present at the closing. The attorney called the sellers and came back in the room and stated, "OK it's not a problem, the sellers will pay for a repair." Unfortunately we did not get this in writting, but in the room with me and my wife was our RE Agent, the loan originator, the banks closing attorney and the sellers RE Agent. We were told to just get a quote for the repair and then drop it off at the sellers RE Agents office and all would be taken care of.
When we had the furnace inspected, we were told that the furnace needed to be repalced because it was cracked and at one point someone had added a sealant to it. This was not disclosed on the P&S. The sellers list the condition of the furnace as "Unknown". We informed the sellers RE Agent of the fact it needed to be replaced and submitted the quote. They came back wanting us to have another furnace person look at the furnace, which we did, and were told the same thing - "The furnace needs to be replaced." We submitted his quote to the sellers RE Agent. When I contacted the sellers RE Agent, via email, to find out the status, I was told, "do not expect the sellers to pay to have the furnace replaced."
Is there any laws that protect me against such things? Is there any sort of 30 day period, post closing, that the seller is responsible for certain things? We only signed the closing docs because we trusted that the sellers attorney would do the right thing. Is the Lenders attorney at fault at all for insisting that there be a hold back, considering this is an FHA loan and the house is not livable since there is no heat or hot water??
What can I do? It's not fair if this comes down to a "learning experience."
Please get back to me ASAP as we are supposed to move in this weekend
2 Answers from Attorneys
It sounds like you did not have your own attorney representing you in the transaction, which is always a huge mistake.
I think you should hire counsel to review the documents in your transaction with an eye toward filing suit against the sellers. Just becuase there had been a 'fix' of the furnace at some point does not necessarily mean that your sellers are the ones who did it, or that they knew about the problem. Most likely, however, they did know about it. If they did know about the furnace, and they made an affirmative misrepresentation to you that its condition was 'unkown', I think you are on solid footing to bring your suit. There is no guarantee of success of course.
I agree with Mr. Vaughn-Martel that it is likely the Owners knew of the problem and did not disclose it. You should retain counsel to review the documents and recommend how to proceed. You can tell the Seller's agent you intend to contact an attorney and sue if you cannot resolve the matter without attorneys. It might be cheaper to split the cost of the new furnance, if the Seller's want to avoid litigation.
Good Luck, but next time make sure you have your own attorney and if the home is more than 5 years old get the furnance checked by someone who services furnaces.
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