Boston Globe 12/28/02 RE Section: Defects generate lawsuits

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Boston Globe: December 28, 2002: Real Estate Section: Page E-1

Look beneath the surface

Defects generate lawsuits, so don't scrimp on home inspection when you buy

By Alan J. Heavens, Knight Ridder Newspapers, 12/28/2002

The number one source of litigation in residential real estate transactions, according to lawyers, is the failure by sellers to disclose property defects.

But buyers, even when the supply is short and the competition tough, should be on the lookout for problems.

Red-flag defects include problems such as asbestos, radon, lead-based paint, toxic mold, and poor indoor air quality, as well as structural issues such as foundation cracks, leaking windows, sagging floors, and buckling walls.

Consider, too, the age of the furnace, the condition of the roof, drainage, and whether there is a fuel-oil tank buried in the yard.

If you are going to spend top dollar for a house, you want a golden goose, not a turkey. That doesn't mean the house has to be perfect. Experts say buyers spend an average of $6,000 within the first six months after they move in - but wouldn't you rather focus on curtains and paint than on the roof?

Sellers cringe at the mention of it, but you should not forgo a professional home inspection.

Before an inspector begins work, he or she is required to list what the inspection will entail, so there will be no misunderstandings.

For example, some exclude inspections for termites, indoor air quality, and mold. Some inspections are based on ''visual observation of existing conditions of the property at the time of inspection.'' That means the report is not a guarantee, nor will the inspector be liable for any repairs or replacements.

Just because you hire a home inspector doesn't mean you should close your eyes. You should hire a termite inspector; reports are required by just about every lender anyway. Make sure the inspector looks for all pests, since it isn't much consolation if you don't have termites but you do have rats or raccoons. Some termite inspectors provide a guarantee - six months to a year, typically. After that, you'll get a notice suggesting reinspection.

Some states require each seller to fill out a disclosure form about the property. In Massachusetts, sellers need not volunteer information, but must answer buyers' queries truthfully.

Still, real estate agents and brokers are obliged to persuade sellers to be candid, said Marie Spodek, an industry consultant. ''Consumers have changed the nature of our business,'' she said. ''They are looking to us for more services and information than we have ever been asked to provide.''

Some sellers aren't fully aware of problems ''if they've conditioned themselves into believing it doesn't exist,'' said Passaro, owner of a Connecticut inspection firm. And ''We need to put defects in perspective,'' he said. ''For example, how many people will acknowledge having a wet basement? Usually the answer is, `Not me,' because even though they sometimes get a little water in the basement, they've conditioned themselves into believing that it only happens to the neighbor.'' Many basements are damp, but that does not necessarily indicate a structural problem, he said.

Passaro suggests that anyone with mold concerns hire an inspection firm. His www.houseinspect.com has information on mold and other problems.

Spodek maintains that disclosure issues arise because buyers don't understand the process, or their rights.

Safety, a good neighborhood, a fair price, affordability and cost-effectiveness, and high resale potential are the five primary areas of buyer concern. But the typical buyer tends not to be aware of everything involved in a house purchase. That includes environmental concerns, such as underground fuel-storage tanks. Not all underground tanks must be removed, but testing should be done before the deal is closed.

Removing a tank might cost $1,500, but removing and replacing contaminated soil might add up to thousands of dollars.

Asbestos, used as insulation for pipes in older houses, remains a concern, but there continues to be a debate over removal vs. encapsulation. Proponents of removal contend the two procedures are equally labor-intensive, and that encapsulated asbestos requires maintenance. Proponents of encapsulation suggest that, because it takes 1,200 asbestos fibers to equal the diameter of one human hair, the problem is difficult to see and get rid of completely.

Lead-based paint in houses built before 1978 is high on the list of red flags and spawned federal regulations on disclosure. But many buyers waive their rights to lead-paint tests because they don't understand the danger.

Children under 6 are the most vulnerable to lead poisoning. Excessive levels can destroy their nervous systems, affect learning and behavior, and cause permanent brain damage.

This story ran on page E1 of the Boston Globe on 12/28/2002.

© Copyright 2002 Globe Newspaper Company.