Property Grunt

Sunday, August 07, 2005

Your word means nothing to me.

The Grunt was looking over Joyce Cohen's excellent Hunt Column about the Gonthas who bought a house in Staten Island. Besides learning interesting facts about Staten Island, there was one part of the article that caught the Grunt's eye regarding problems with a property they were putting an offer. Below is the excerpt.

Last fall, the couple found a lovely Victorian home on Curtis Place. The seller happened to be a real estate agent, who also showed them several other homes. But it was hers they liked the best, and the price was right. All parties agreed on $425,000.

Then, the house inspector flagged two problems: exposed asbestos in a closet, and a capped pipe in the basement floor that might have indicated a buried oil tank. The Gonthas planned to call in a specialist for a further inspection, but the seller balked.

"Maybe there was never an underground oil tank, but we didn't know and were not willing to live with that risk," Mrs. Gontha said. She worried about contamination or collapse.

"The owner got defensive and insisted it was not an oil tank," Mrs. Gontha said. "I said I would be inheriting this problem and needed to be aware of what I was getting myself into. She kept saying, 'Take my word, it's O.K.' "

Neither side would budge. "I needed someone certified in this line of work to tell me it's O.K., and if it isn't O.K. I need to know how much it is going to cost to correct the problem," Mrs. Gontha said. "She couldn't understand why it was so important to get this done." She rescinded the offer.

I want to applaud the Gonthas for keeping their heads on and not letting their emotions run wild. Although they fell in love with the house they were willing to walk away from the deal because their concerns were not being addressed.

Having asbestos in the closet is bad but an underground oil tank that is in poor shape can be just as bad even worse.

So why did the owner prevent the Gonthas from doing an inspection?

The Grunt has thought up of two reasons.

1. The owner is a real estate agent and knew the rules of the game. If the Gonthas had done an inspection and it turned out that the tank was on the verge of contaminating the whole property then the Gonthas could use that as leverage and rightly so against the owner to get a lower price for the house to compensate for the cleanup or have the owner be responsible for the cleanup.

2. If word got around that the property had a defective oil tank then there was also a chance the Gonthas would pull out and no buyers would touch that place with a ten foot pole until the owner had the tank removed or cleaned which would cost the owner money.

What it all comes down to is that the owner was excercising CYA. By preventing any confirmation of the oil tank's real condition and assuring the Gonthas that there was no problem the owner was preventing any further costs from incurring on their end and if there was a problem it would only be discovered after the closing leaving the seller clear of any damages. So by giving the Gonthas their word that the tank was fine and taking advantage of the seller's market the owner was playing a game of high stakes poker with the future of the Gonthas in the pot. The Gonthas simply folded and walked away from the table.

The Gonthas may have ended up paying a higher price for another home on a different street however it is in my opinion they did the right thing and protected themselves for the long run.

People, never, ever prevent anyone from doing your due diligence. Something as serious as an underground oil tank needs to be inspected because if something goes wrong its on your head. I don't care if it is the Pope himself giving his word. You need to get the right people to do the inspections and verify the conditions of the property. Once you buy a property, that's it. You are the one responsible for its maintenence and if there is something wrong with it that you didn't know about when you bought it. Well, TS!