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Wednesday, December 29, 2010

Seller Liability for Ice Dams

Who Pays?

Unfortunately, the way this Winter is unfolding, the first major (and expensive) repair facing many people who bought Twin Cities homes this Fall is for ice dams.

Can they look to their Sellers to absorb some -- or all -- of the expense?

Legal Standard

To answer the question, first revisit the two-pronged legal standard for recovery: 1) the problem existed before the Buyer purchased the home; and 2) the Seller knew -- or should have known -- about the problem.

So, if you closed on one of those balmy October days we enjoyed this Fall . . . you likely flunk #1, never mind about #2.

Pre-existing Condition

But what if the home historically suffered from ice dams, and this year's are simply the latest recurrence?

Usually, there's residual evidence that a home previously had ice dams, even after the damagehas been repaired.

Plus, a good home inspector will note the roof's pitch and design, following any roof valleys to the home's interior ceiling(s) to look for signs of past leaking (stains, fresh paint, etc.).

Seller Disclosure

Of course, at least in Minnesota, the Home Seller is obliged to tell prospective Buyers if they've previously had ice dams -- or any other roof damage -- in state-mandated disclosure forms.

Misrepresenting such material information not only risks liability for fraud (and its open-ended statute of limitations), but isn't likely to fool a Buyer who does their due diligence.

For all those reasons, it's likely that either a home hasn't previously had ice dams -- or, if it did, the issue was identified and dealt with prior to closing.

Bottom line?

Just like Buyers usually can't recover from Sellers when, post-closing, they get water in their basement after a rare, torrential rain, it's unlikely that they have recourse for ice dams following this year's record-breaking December snowfall.

Fortunately, most homeowners' insurance policies cover ice dam-related roof damage, subject to a deductible.

4 comments:

DFW Real Estate said...

Fortunately we do not have this issue in the Dallas area.

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