DEAR BOB: About four months ago we bought our first home. It was built around 1930 in a very charming older neighborhood with great schools for our two kids. Although we probably bought the cheapest home in the first class school district, we are glad we did. However, we have a big problem with our home warranty company. Our home seller paid for a one-year home warranty policy, which we understand cost her around $450. Within a week or two, the furnace gave off a bad odor. We phoned the home warranty company, which sent a repairman the next day. He said the furnace was in very bad condition and gave us a written warning not to operate it. Because the weather was cold, we had to act quickly. We expected the home warranty company to either fix the furnace or install a new one. But the warranty company denied liability since the furnace was a “pre-existing condition.” Because we were desperate for heat, we bought a new furnace, which cost us almost $5,000 installed. The warranty company refuses to pay anything. Do we have any recourse? –Vince R.
DEAR VINCE: Yes. You should sue that home warranty company. Depending on the local Small Claims Court jurisdiction, you can either sue there or in the local court of general jurisdiction for reimbursement.
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Home warranty companies are notorious for denying policy coverage by stating a claim was an excluded pre-existing condition, especially for large claims like yours. These warranty companies are the “pros” and homeowners like you are the “amateurs.” They know that so they often deny legitimate claims like yours, realizing most homeowners just go away and never sue them.
You should report this matter to your state insurance regulator. Unfortunately, home warranty companies are very loosely regulated in most states so they continue to get away with denying policy coverage falsely based on a “pre-existing condition.”
PROTOCOL FOR CHOOSING REALTY AGENT TO LIST HOME FOR SALE
DEAR BOB: What is the protocol procedure for choosing a real estate agent to sell my house? Is it OK to interview maybe three agents and let them know I will choose among them? If I am dissatisfied with the agent I choose, am I stuck with him or her or can I “fire” that agent and choose another? –Check W.
DEAR CHECK: Yes, you should interview three (or more) successful realty agents who sell homes in your vicinity. They won’t mind the competition because they know smart home sellers interview several agents before selecting the best.
However, after you sign a listing with an agent, you are stuck with that agent for the listing term. That’s why I suggest signing an exclusive right-to-sell listing for no longer than 90 days. If you checked the agent’s references of recent home sellers in your area, you can be confident the agent will do a good job.
However, if your home doesn’t sell within the 90 days, then you can either renew the listing for an extra 30 days, or let it expire and relist with a better agent.
The only valid legal reason to cancel during the listing term is the agent’s lack of “due diligence.” If that should happen, contact the listing agent’s office manager or broker to ask your listing be transferred to a better agent within the same firm for the remainder of the listing term.
WHERE TO FIND PROFESSIONAL HOME INSPECTORS
DEAR BOB: In the past you mentioned a Web site for professional home inspectors. My mom is moving from her home she has enjoyed for 47 years. We need help getting the home prepped for sale. Where can we find a reliable home inspector? –Elwood H.
DEAR ELWOOD: You and your mom are very wise to obtain a professional home inspection before listing the residence for sale. In addition, you might want to obtain a professional pest control (termite) inspection, unless your mom’s house is in Alaska.
I often recommend the Web site of the American Society of Home Inspectors (ASHI) because they have the toughest membership standards for professional inspectors. You will find it at www.ashi.org or by calling 1-800-743-2744 where local ASHI members can be located.
By having a professional home inspection before listing the home for sale, your mother can either have the home defects repaired or she can simply disclose them to prospective buyers so they are fully aware before making a purchase offer.
LAW OF FIXTURES SOMETIMES ISN’T CRYSTAL CLEAR
DEAR BOB: Thanks for your recent article about when home fixtures are included in a home sale. I loved the story about your mother screaming when the sellers had removed the chandelier in her condo, but I’m glad there was a happy ending. My fixture issue involves the recent sale of my house. Two years before the sale, I remodeled the kitchen extensively. I installed a Sub-Zero refrigerator, which had a front panel that matched the new cabinets. Nothing was said in the sale contract about the kitchen appliances, so I unplugged the refrigerator and had it moved to my new condo. It was not built in and the movers easily pulled it out. However, the buyers quickly yelled and screamed. They thought the refrigerator was included in the sale because the front panels matched the cabinets. We’re talking about a refrigerator worth around $4,000. My buyers want me to either return the refrigerator, buy them a new one, or they will take me to court. What should I do? –Irene W.
DEAR IRENE: Your situation is known in fixture law as a “gray area.” Neither you nor the buyers are 100 percent correct. If the buyers wanted the refrigerator included in the sales price, they should have specified it in their purchase contract.
As you probably know, a fixture is former personal property that, by means of permanent attachment to the structure, has become part of the real property. Examples include light fixtures, built-in appliances such as dishwashers and ovens, and custom permanently attached stereo speakers.
Although the front panels on your upscale Sub-Zero refrigerator matched the cabinets, that doesn’t make it an installed fixture that transfers ownership with the house. However, if it was built in to the house, as many upscale refrigerators are, then the buyers have a strong argument the refrigerator was a permanently attached fixture, which is included as a fixture with the house.
WHAT HAPPENS WHEN A JOINT TENANT OWNER DIES?
DEAR BOB: If there are three joint tenants with right of survivorship, when one joint tenant dies, do the other two owners remain as joint tenants with right of survivorship? Or does the ownership revert to tenants-in-common? I asked title insurance company officers, and an attorney with the state association of Realtors, but no one knows for sure. What happens? –Robert H.
DEAR ROBERT: I am shocked. Any savvy first-year law school student knows that when one joint tenant with right of survivorship dies, the surviving joint tenants receive the deceased joint tenant’s share.
In your situation, the three joint tenants each owned an undivided one-third interest in the property. After one joint tenant died, the two surviving joint tenants each own a one-half interest as joint tenants with right of survivorship.
The ownership does not become a tenancy-in-common after one joint tenant dies.
However, in most states, the surviving joint tenants must record with the local recorder of deeds (1) a certified copy of the deceased’s death certificate, and (2) an affidavit of survivorship. Because the individuals you consulted obviously have no clue, please consult an experienced local real estate attorney for more details.
CAN A CREDITOR RECORD A LIEN AGAINST HOME?
DEAR BOB: My domestic partner and I own our home. During a recent mortgage refinance investigation, it was discovered a lien was placed on our home by an auto finance company. Is it legal to place a lien on the property without notification? Can I file a lawsuit to have the finance company present a bill of sale to the vehicle? –Gilberto A.
DEAR GILBERTO: As a general rule, a creditor cannot record a lien against a real estate title unless that creditor has obtained a court judgment against the debtor and property owner.
Even if an invalid lien is recorded against a property title, the title insurer will always be very cautious before issuing a title insurance policy.
Anyone can sue anyone. However, there are serious penalties for bringing groundless lawsuits. There are also slander-of-title penalties for recording invalid liens.
Before you sue the auto refinance company to clear the title, please make a phone call to find out what’s going on. Be very polite because resolving the issue on a friendly basis is usually far better and cheaper than a lawsuit. For more details, please consult a local real estate attorney.
The new Robert Bruss special report, “How to Obtain the Best Appraisal of Your House or Condo,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.
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