Dear Mr. Azrael:
My question is in regards to a deposit on a property.
I put a $500 deposit down on a home that was contingent on a home inspection. I was worried about water problems in the basement. The inspector made the inspection. He told me and my wife and the agent and the women who lived there that he had bad news: There was water behind the paneling.
I told my agent that I did not want to live with the fear of having water in the basement.
The sellers said they would correct the water problems themselves by taking off the paneling and putting waterproof paint on it. But I still did not want to buy the house.
Will my deposit be forfeited?
Dear Mr. Flynn:
You were very wise to include a home-inspection contingency in your purchase contract.
A home-inspection contingency gives the buyer the right to have the home inspected by a qualified professional. The inspector typically checks the structure, plumbing, electrical, heating and air-conditioning systems, as well as the roof and basement.
In your case, the inspector found water seepage in the basement.
Most home-inspection clauses allow the sellers to correct the problem at the sellers' expense.
If the sellers have the problem repaired in a good and workmanlike manner, the buyer usually is obligated to purchase the property.
The sellers of the home you are buying propose to correct the water problem themselves by removing paneling and applying waterproof paint to the damaged area. Your home inspector should be able to tell you whether this "fix" is likely to solve the problem.
The inspector may believe more extensive (and expensive) work is needed to correct the damage in a good and workmanlike manner. A qualified professional -- not the sellers -- should be the judge of whether waterproof paint will adequately fix the existing damage and prevent reoccurrence.
Unless waterproof paint will correct the leak, you should be able to get your deposit back.
You must also carefully read the home-inspection addendum in your particular contract. Some provisions are more "buyer-friendly" than others, and allow you to cancel the contract for any reason if the home inspection is unsatisfactory to you.
Buyers should insist on a liberal home-inspection clause. They -- should have the right to have a professional inspection and get their deposit back if the inspection reveals any defect they are not willing to accept. Buying a home is a major investment. Buyers should make sure their contract protects them in the event an inspection reveals defects.
Pub Date: 12/13/98