Many buyers find exclusions aplenty when addressing defects
Benny Kass
Inman News
DEAR BENNY: Our home was built and completed in October 2007. Twice in the past year during driving rain and high winds, we’ve experienced leaks. The first time, a leak started on the back porch over the exit door to the porch. The second and most recent time, it was a leak coming through the light fixture in the walk-in closet of one of the upstairs bedrooms.
The builder’s one-year warranty has expired. Thinking we were covered under the 2-10 Home Buyer’s Warranty (Workmanship/ Systems and Structural Limited Warranty Coverage), I called to find out that the roof is not covered; it’s only the roof framing systems under "designated load-bearing elements that are covered under this structural defect warranty." Is this not a framing issue? Do we have no recourse under this warranty? Any advice would be appreciated. –Willie
DEAR WILLIE: I am not an engineer so I really can’t give you a specific response. I suggest you contact a licensed engineer (or architect) who should be able to give you an answer.
The engineer may also be able to determine if there are housing or building code violations. If so, you may be able to convince your builder that even though you are out of warranty, he should correct your problems at his expense.
I wanted to use your question to "get on the soapbox" about these home warranty programs. I know I will probably get a lot of flak on what I have to say, but here goes. I am convinced that most — if not all — of these "warranty programs" are merely public relations for builders and the real estate industry. I have been involved in a number of situations such as yours where the client found significant damage in his or her home, only to learn that the warranty insurance program did not cover those issues. In fact, several years ago, my client discovered that her house was sinking because it was built above an underground stream. The insurance policy did not cover this, even though it was promoted as an "all-inclusive" warranty.
The bottom line: If you are inclined to get a warranty program — and especially if you have to pay for it — make sure that you and your legal advisors carefully read the policy in advance. Quite often — as with any insurance policy — there are more exclusions than there is coverage.
DEAR BENNY: Years ago our dad built a cabin in Colorado and left it to his five children from two marriages. Since that time four of us have split the expenses of maintenance, taxes and insurance. We have a large family reunion at the cabin every four years, and family members use the cabin annually. One brother has never contributed and is difficult to locate when needed. The four of us are getting older and would like to keep the property in the family, as everyone enjoys the use of the cabin and the reunions. There are 12 children from the four of us plus two from the brother that does not participate. What is the best option for keeping the cabin in the family and splitting the costs involved? –R.J.
DEAR R.J.: Because the property is in Colorado, the law of that state will ultimately control what you can and cannot do. Generally, however, the four of you could try to buy out the nonparticipating sibling. The sales price should properly take into account his nonpayment of expenses.
Alternatively, even if you cannot find your brother, the four of you could file what is known as a suit for partition. This is a procedure universally accepted throughout this country. The courts have made it clear that if two or more people own a piece of property and cannot get along with each other, the courts will force the sale. Unfortunately, the only winners here are the lawyers, the speculators and the trustees (or real estate brokers) assigned to sell the property.
Your attorney will assist you in explaining the process, the costs involved and the way that you can legally serve your brother (even if he is out of state) to bring him into the lawsuit.
Presumably, the filing of the lawsuit may trigger an interest in your brother to sell. But whether he voluntarily or involuntarily agrees to sell, the four of you can ask the judge to allow the sale of his interest to you all.
Once you own the property, you should enter into a formal, written partnership or co-ownership agreement, which will spell out such matters as (1) how expenses are shared, (2) use of the property, and (3) outlining the details of what happens when a party dies, giving rights of first refusal, etc.
I have been involved representing clients in a number of partition suits, and unfortunately, all of them involve family members, such as brothers and sisters.
DEAR BENNY: In one of your columns you discussed a book that is helpful for members of condo associations. I neglected to save it. Can you please let us know its title?
We live in a fairly new association, still mostly run by the developers. The monthly dues have already been raised in 2008 and we were notified that they will increase again in 2010. My husband and I feel that the developers are having financial difficulties, have insufficient funds in the reserve accounts and are not disclosing potential/real problems (i.e., one of the buildings appears to be slipping on a moderate sloping grade, as evidenced by cracking slab in some of the units and huge gaps around exterior doors/windows).
We would like to know our options, other than selling our unit (which does not appear to have any problems). –Anonymous
DEAR ANONYMOUS: One book that may be of interest and use to you is entitled "New Neighborhoods: The Consumer’s Guide to Condominium, Co-Op and HOA Living." It is written by Gary Poliakoff, a prominent Florida community association attorney, in conjunction with his son Gary.
You can find the book on the Web at newneighborhoodspublishing.com.
One option that many homeowners in your situation take is to hire an attorney to represents your interests. That attorney should be able to get access to all of the association’s books and records, since in most states — and subject to some restrictions — those documents are available to all owners.
The attorney could also put pressure on the developer — and remind them that even though they are the developer, when they serve on the association’s board of directors, they owe a fiduciary duty to all of the owners. This is an important issue, often overlooked (or ignored) by developer representatives who are also board members.
DEAR BENNY: We have a timeshare we can no longer use because we can no longer travel. There is a yearly tax/maintenance charge of $500 per year that is hard to keep up with in these economic times. We have offered it to family and friends, but everyone’s in the same boat. We are prepared to even give it away. We have two weeks of use coming soon and all fees are paid up until the first of next year. We welcome any suggestions you may have. –Fred
DEAR FRED: It will not be a consolation to you, but you are not alone. I get dozens of e-mails a month on this same subject. There is no easy answer. And the last thing you want to do is have a foreclosure on your hands — and on your credit rating.
Have you talked with other timeshare owners? Perhaps they would be interested in buying or getting it for nothing? Have you talked with the timeshare management? Some companies have programs to assist in the sale of those timeshare units.
Some churches may be willing to accept the gift as a charitable contribution. However, when I made this suggestion in the past, I received a friendly e-mail from a local pastor saying that they just did not want to be burdened with this.
Finally, go to your favorite search engine on the Web, type in "timeshares" and you will get (at last count) more than 460 million hits. I do not vouch for any of the companies listed; you will have to do your own investigation and evaluation.
Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to benny@inman.com.
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