Do Fredericksburg Homeowners Have a LUST Problem?
July 23rd, 2009 categories: Real Estate News, Relocating
”Approximately two-thirds of lawsuits brought against real estate brokers are filed by dissatisfied purchasers, involving allegations of misrepresentation, negligence or fraud.”
Realtor Institute of Virginia
Have you ever heard the term, “buyer’s remorse“? Most of us have experienced it, more than once. You pay a price, normally, a substantial price, for an item that’s the apple of your eye, only to find out later, it wasn’t as “cool”, or neat, or necessary as you previously thought. There are some things avoidable in life, but temptation doesn’t appear to be one of them. Often we purchase things we don’t need, only to have regrets later.
Buying a home in Fredericksburg, Stafford, or anywhere for that matter, and doing it in a way that allows you to walk away with no regrets, normally requires careful planning and research. Home buyers may know what they want in a home, but, once a potential property is identified as a candidate for purchase, how much research is necessary in order to adequately inform oneself of what the specific home has to offer?
Yes, it’s fairly easy to identify obvious defects. As a matter of fact, Virginia’s Residential Property Disclosure Act and Virginia Code require the seller of residential property to provide the buyer with a Disclosure Statement. Practically, this looks more like our old Disclaimer Form. The statement’s verbiage begins by saying:
The Virginia Residential Property Disclosure Act (§ 55-517 et seq. of the Code of Virginia) requires the owner of certain residential real property, whenever the property is to be sold or leased with an option to buy, to furnish to the purchaser a RESIDENTIAL PROPERTY DISCLOSURE STATEMENT stating the owner makes the following representations as to the real property. Certain transfers of residential property are excluded from this requirement (see § 55-518).
Property Address/
Legal Description: ________________________________________________________________
The undersigned owner(s) of the real property described above makes no representations or warranties as to the condition of the real property or any improvements thereon, and the purchaser(s) is advised to exercise whatever due diligence the purchaser(s) deems necessary including obtaining a certified home inspection, as defined in § 54.1-500, in accordance with the terms and conditions as may be contained in the real estate purchase contract, but in any event, prior to settlement on the parcel of residential real property.
Virginia is a “buyer beware” state. The popular Latin form of this is Caveat Emptor, which literally means, “Let the buyer beware.” In other words, when buying a home, it is up to the buyer to determine if there are problems. Does that mean the seller doesn’t have to inform the buyer of known problems with the house? No, it doesn’t mean that at all.
Sellers have a requirement to disclose all known material defects of the property. What, you might ask, is a “material” defect. Any condition that materially affects the value or use of the property adversely. But, what if the defect is not known, or unknown? That’s what home or property inspections are designed to discover. Those unknown problems or faults are sometimes called “latent” defects.
Charges of misrepresentation, or concealment of pertinent facts of a property by a Realtor, are serious charges. It is a clear violation of Article 2 of the Realtor Code of Ethics. According to the Code:
Article 2
REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law. (Amended 1/00)
Standard of Practice 2-1
REALTORS® shall only be obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority.
In the Commonwealth of Virginia, one common property defect that ’s resulted in claims of misrepresentation, are underground storage tanks (UST). Specifically, the problem of leaking underground storage tanks, better know as LUST. As you might imagine, these leaking storage tanks are an environmental hazard. According to the Environmental Protection Agency (EPA), underground storage tanks are buried and contain, or previously contained, liquids or other materials which may be hazardous if discharged freely into the ground. Because these tanks, or the piping associated with these tanks, often deteriorates and leaks, they’re potentially, extremely hazardous. The EPA claims there are close to 2 million underground storage tanks currently in use and a significant number of abandoned ones. According to them, only a small percentage of these are protected against corrosion. The EPA estimates there are over 100,000 leaking tanks, and the number is rising quickly.
Underground storage tanks can present serious problems, and be a source of liability for the owner since LUST pose severe contamination problems for soil and water supplies. Soil and water contamination are just two of the problems resulting from leakage. Fortunately, there are steps homeowners, and buyers and their agents can take to identify properties containing these items. Of course, hiring consultants with expertise in this area is step #1. And, in many states, the Department of Environmental Quality(DEQ) receives federal funding for clean up of USTs. So, while the property seller may “own” the problem, they’ll frequently receive federal funding to clean it up. We’ll delve a little deeper into those details in our next article.
