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Wire Fraud? What to Do When Problems Surface After Declining a Home Inspection

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By Lew Sichelman

RISMEDIA, Oct. 16, 2007-(MarketWatch)-Question: I am a service member who has just returned from a 14-month unaccompanied deployment. I bought my first home upon returning, an exciting venture. However, being new in this business, I didn’t know what to expect. Due to the cost associated with moving my family, I was unable to pay for a home inspection.

After moving in, I found that the electrical wiring for some of the components was not up to code for the state and may present a danger to my family. These were things not noticed during the walkthrough. Do I have any legal ground against my Realtor or am I just out of luck? – Jay.

Answer: You aren’t the only home buyer to be caught in such a dilemma. In the halcyon days, when sellers were receiving several offers at a time and choosing the best, many would-be buyers offered to forgo what has become an almost standard home inspection in hopes the seller would find their offers most appealing. After all, an inspection often uncovers latent defects that the seller must address in order for the deal to go through. Nobody keeps statistics on these things, but I am hopeful that buyers who passed on an inspection came away unscathed, that whatever problems that were discovered after they moved in were minor and could be taken care of with little cost and a timetable that the new owner could live with.

In your case, you may not be able to live with the danger that lurks behind your walls. But unless the seller knew that the wiring was not up to code, you are up the proverbial creek.

In most states, sellers are required by law to disclose such material defects to would-be buyers. If your sellers were in the dark — say they bought the house brand new from a builder and never had a spark of trouble with the wiring — then they probably had no clue. But even if they were aware of the problem, it would be difficult to prove in court. Unless you show some type of negligence, I’m afraid the problem is now yours and yours alone.

As far as the real estate agent’s liability is concerned, he, too, cannot peer behind the walls. Unless the seller told him of the faulty wiring and the agent did not reveal that information, as agents are required to do in most states, then you might have cause for an action against the agent. But proving that was the case also would be difficult.

Still, it wouldn’t hurt to go back to the seller and the agent and ask them to at least help defray the cost of resolving a wiring problem that not only existed before you bought the place but a problem they should have known about and should have disclosed. The threat of legal action against them may help them see the light.

But unless you can prove the seller and his agent purposefully and knowingly withheld information about the defect, I’m sorry to say, you are pretty much on your own.

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