Water Leak Appears On Day Of Closing

Q: I just bought a home two weeks ago. On the day we closed, when I met the seller’s agent at the house to get the keys and move in, there was a tag on the door from the water company.

The tag was a warning that the previous month of water usage was very high and there must be a leak on the property. I have now verified that there is a leak. It is somewhere between the meter and the house.

The sellers’ agent told me she would look into it. I still have the form that has the date of the meter reading and time. The time of the reading was before we actually closed on the property.

This is clearly an existing condition that nobody knew about until the city posted the warning. Should the seller repair the leak since it was present before I closed on the property?

A: The answer to your question depends on the terms of your contract. If your contract provides that the seller must make repairs to the property for issues that are evident prior to the closing, the sellers might be obligated to make the repair.

The real question is, why you didn’t get something in writing from the seller’s indicating their agreement to make repairs? Or, why you didn’t delay closing until you investigated the issue further? And finally, why you didn’t hold back money to make sure that the sellers’ actually fix the problem?

Many states have seller disclosure laws, but the sellers’ responsibility for disclosure is generally for matters known to the seller. You indicated that nobody knew of this issue which would mean that the sellers did not know, couldn’t disclose to you and probably have no obligation to make a repair under many state seller disclosure laws.

Since you’ll have to make the repair yourself, you should get three estimates and hope that the repair isn’t too extensive. The listing agent told you she would look into it but didn’t agree to make any payments or promises. It’s likely that you’ll end up having to pay for the repair yourself.

You should obtain copies of water bills from your local municipality for the prior two years to see when the increase in water usage was evident. You then should take that information, along with your real estate contract and the tag placed on your door to a real estate attorney in your area to determine whether you might have a case against the seller.

If the fix is minor, you may decide to take care of it yourself. If the repair is major, you might want to move forward (so you’re not running up an enormous water bill) and meet with an attorney. If the water bill shot up so high at one specific bill, the seller’s would have known there was a problem with the house and probably would have had an obligation to disclose the issue to you.

But if the problem arose on the bill just before the sale, it might not be enough for the sellers to have known they had a problem with their water main.


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