HOME INSPECTIONS Category
BUYERS MUST EXERCISE DUE DILIGENCE WHEN BUYING REAL ESTATE
HOME INSPECTIONS, REAL ESTATE PRACTICE, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
For the first 15 years of my real estate career, buyers were not proactive checking every aspect of a property they were buying, in large part because a seller warranted the condition of the property by language contained in the purchase agreement. The contract stated the seller would warrant that the roof was free of leaks, the appliances were in working order, the mechanical systems including HVAC, electrical, plumbing and fireplace were all guaranteed by the property owner. If a buyer found something out of order, the seller automatically had to fix the problem.
My, how times have changed. Someone finally got around to reading the California Constitution which clearly states all sales of real property are “as is“. Contracts were reworked to inform the buyer it was their responsibility to thoroughly investigate every aspect of the real property. This point is driven home time and again in myriad forms that most buyers are provided in connection with a real estate purchase. Real estate professionals have many tools in their forms toolbox to get this message across.
The first is the purchase agreement, which has a property condition clause and a buyer investigation clause that lays it out in plain language that the buyer must use due diligence investigating a property they are purchasing. Attached to the contract is a Buyer’s Advisory that again stresses the importance of making a concerted effort to inspect a property of interest.
Sellers have an obligation to disclose all known material facts that might be of interest to buyers. Sellers also have statutory obligations to deliver a number of disclosures and reports for the buyer to review before they commit to completing the purchase. Agents involved must also make a diligent inspection and put the findings in writing and provide a copy to the buyer in a timely fashion prior to escrow closing. Buyers are also encouraged to hire qualified professionals to inspect the property.
Most of the disclosure forms and advisories contain details about what aspects a buyer should consider investigating. These items are there because somebody, somewhere was sued over failure to disclose material facts that affected the value or desirability of the property: Here’s a short list:
- Square footage, lot size, boundaries
- Geologic and environmental conditions
- Mold and water intrusion
- Septic and well (if applicable)
- Easements, access and encroachments
- Home and pest inspections
- Fire, flood and earthquake hazards
- Building permits, Zoning and code compliance
- Views (they might be blocked by trees or construction)
- Repairs, replacements, remodels that trigger compliance with new regulations
- Errant golf balls (people that buy homes on golf courses should beware)
- Schools, crime, water shortages, neighborhood noise problems
- Pet and animal odors in carpet, etc
- Insurability of property and insured
- C,C&R’s and HOA restrictions/rules
- Recalled products installed in homes
- Rent restrictions
And the list goes on and on. An experienced agent can answer some of these questions or direct you to the right place to gather information. Realtors have developed forms that assist the seller in making detailed disclosures about items of interest and items repaired in the past. It is not unusual for a buyer to be provided dozens of forms and reports that cover virtually every detail, assuming they utilize the services of a competent agent.
My philosophy is I would rather have buyers not buy a property that has problems or is owned by an individual that refuses to complete pertinent disclosures than to have them buy it and sue after the sale closes. I do everything possible to make certain a seller discloses every detail that could possibly be of interest and a buyer exercises due diligence investigating the property in question.
Litigation over a sale is no fun and rarely resolves the problem to any one’s satisfaction. If I can be of service, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
BE SURE YOUR AGENT DOES THEIR DUTY
HOME INSPECTIONS, REAL ESTATE PRACTICE, SHASTA COUNTY, TIPS FOR BUYERS
State law requires all real estate agents who sell residential real estate, more specifically 1-4 dwelling units, conduct a “reasonably competent and diligent visual inspection” of the subject property and report in writing any facts or findings that affect “the value or desirability of the property that such an investigation would reveal”.
The reason I mention this, is sometimes I’ve come across situations when an agent shows a prospective buyer a property of interest, only to have the buyer choose another agent far away from Shasta County to write the offer and collect a commission. In many cases, this out of area agent is a friend or relative of the buyer, but has never seen the property and may never see the property before it closes escrow. This means the agent/friend/relative can not possibly comply with this section of real estate law, Civil Code Sections 2079-2079.6.
Not to mention, (OK, I will) it is foolish for an out of town agent to sell a property in an area outside their primary market area. Most prudent real estate brokers prohibit their agents from selling in unfamiliar areas. The chance of a lawsuit escalates when an agent sells in an area they know very little about. There is no law against it; a California real estate license is good anywhere in the state. However, the agent has a duty to make a visual inspection of the property and it is helpful to have local knowledge of factors that may affect the desirability of the property.
Agents from San Diego, for example, are unlikely to know what areas of Shasta County have low production water wells or septic leachfield problems. Realtors are expected to stay current with local policies that could impact a property’s value. Water rationing or building moratoria are examples of restrictions that could be important to a buyer. All cities have positives and negatives that only local agents are aware of. Think twice about having someone represent you that is not a local expert because they are jeopardizing your investment and their own license to sell real estate.
If the buyer discovers a problem after the sale has closed, and their out of town agent has failed to meet their fiduciarcy duty to diligently represent their friend or relative, the agent will not do well if litigation ensues. The friendship could also be strained or destroyed by such a gaffe. The smarter course of action would be to have a local agent represent you and have the agent pay your friend/agent a referral fee.
Regardless who ultimately represents you, be certain your agent provides you a detailed report of their diligent visual inspection prior to the sale being finalized. It’s the law!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
IT’S TIME TO GET YOUR ROOF READY FOR WINTER STORMS
HOME INSPECTIONS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
Many homeowners wait for a leak to develop before addressing overdue roof maintenance issues. This saves money in the short run, but can lead to expensive repairs including damage to the home’s interior and even toxic mold! Not only that, if a homeowners insurance claim is filed to help pay for repairs, you and your property could have a major black mark on your CLUE report (See prior post).
Many maintenance items can be tackled by the homeowner depending on your ability and roof type. Composition and wood shingle roofs are usually easy to access and maintain. Tile and metal roofs could be more tricky due to the chance of cracking tiles while walking on them or slipping off a slick metal roof. Hire a roofer to make repairs if you have any doubts. Routine maintenance includes:
- Cleaning gutters and downspouts
- Removing leaves and pine needles from roof surface and valleys
- Sealing pipe and fireplace flashings
- Power washing moss off (usually on shaded north exposures)
- nail and/or replace loose shingles
In the event your roof is more than 15 years old, consider having a roof inspection. Determining the 
remaining life expectancy should be left to a reputable roofer. Plan to replace the roof before it starts leaking. If you know several years ahead of time when you will need to replace your roof, you can budget and save the necessary funds.
Small homes with less than 1,000 square feet will need at least $3,500 to remove and replace a comp roof. Medium size homes should expect to pay $5,000-$8,000 and large homes could cost $10,000 or more to replace a roof. If you convert from wood shake to comp, expect an additional cost for sheeting your roof.
Comp roofs last from 15-30 years in the Redding/Shasta County area, depending on quality. Tile roofs can last 50 years or more but typically have tiles that crack and must be replaced from time to time. Flashings should be inspected annually and sealed as necessary. If you see water spilling over the tops of your gutters, it’s time to clean them and the downspouts too.
Failure to maintain a roof can cause structural damage that could costs hundreds or thousands to repair. Roof joists, rafters, sheet rock and your valuable possessions can all be damaged by a leaky, neglected roof. It is one of the most important components of any home and should be properly maintained. Buyers and sellers of homes should take a close look at the roof before a sale closes escrow. The large expense of replacing a roof can bankrupt a buyer that just drained their cash resources to buy a home. Most lenders require a 2-3 year life expectancy at a minimum. In my opinion, buyers should not buy a home unless the roof has at least 5 or more years of life remaining.
Buying or selling, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
PICK THE RIGHT PEST INSPECTOR WHEN BUYING OR SELLING A HOME
HOME INSPECTIONS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
Many people believe state law requires a pest inspection when a home is being purchased. It is not the law, but common sense leads most buyers to have a home they are purchasing inspected for pests. New construction is the only logical exception to this practice. The first decision is to decide who should conduct the inspection.
In California, their are two branches of the pest control industry. One branch focuses on eradicating pests by spraying or trapping them as a preventative or control measure. Local examples of such companies are Terminix, Orkin, Clark,Woods, Redding Spray Service, etc. The other branch focuses on structural inspections for wood-destroying pests and bidding correction of damage caused by such pests (a perfectly legal conflict-of-interest). Examples of local companies specializing in this branch include Shasta, Inter-County, Arrow and Trinity Pest Control. Some companies are licensed and capable of doing inspections, spraying and corrective work.
The primary culprits in the Greater Redding/Shasta County area are subterranean termites and dry rot
caused by fungi. Aerial termites that invade attics are not normally found in this area due to freezing temperatures in winter. Subterranean termites are found almost everywhere in the Northstate and are just waiting for an opportunity to become active. Leaving wood or cellulose debris (cardboard boxes) directly on the ground will almost certainly attract termites sooner or later. Homeowners unknowingly store wood under their home or deck or build structures or fences out of wood that touch the ground, inviting these pests to a banquet.
Dry rot is caused by wood being exposed over a period of time to moisture. The fungus starts on the surface and eventually eats through the wood fiber causing the wood to rot. Common causes are:
- plumbing or roof leaks
- failed shower pans
- leaking pipes or drains
- poor drainage due to faulty grade around home’s foundation
- clogged gutters/downspouts
- failing to keep decks stained or siding painted
If a pest operator finds a termite infestation, budget at least $400 to have the foundation or crawl space treated with a termicide. If the infestation is extensive, a contractor may be needed to remove and replace infested wood members. Dry rot repairs can be particularly expensive if large decks or tile shower stalls are involved. Concrete slab foundations typically have fewer problems than raised wood floors constructed on pier and post/perimeter concrete foundations.
It is legal for pest control operators to bid the cost of correcting pest infestations they find and include in a written pest report. A licensed contractor can also be utilized to replace rotted wood or termite infested lumber. Roofers sometimes are engaged if dry rot damage is confined to eaves, rafter tails and roof sheathing. Pest control operators must be used if any chemicals are to be applied to kill termites. Copper naphthenate can be used by anyone to eliminate surface fungus that has not damaged the structural integrity of the infected wood member.
Pest reports are typically divided into two sections. Section I includes findings that wood destroying pests are actively infesting the property. Examples include termite or dry rot infestations. Section II are findings of conditions that could cause an infestation if allowed to continue unchecked. Plumbing leaks, storage of wood on dirt under a home, surface fungus that has not penetrated the wood and faulty grades are typical items called out in this section.
A prudent seller will obtain a pre-sale pest report ($80-$100) and either repair the items or make the buyer aware their are repairs recommended. A prudent buyer should review any reports a seller provides and consider hiring their own inspector to verify the findings. It has been my experience that some inspectors miss significant problems found by subsequent inspectors or, in some cases, the buyer after the sale has closed.
In the event a pest inspector is hired to inspect and clear a property of any pest infestations, the pest control operator typically guarantees the property for several months after the date the pest clearance is issued. If the seller or a contractor completes the repairs, the seller could be be on the hook either directly or indirectly if the buyer discovers a problem.
It is important to use a reputable pest control company to inspect your property. Doing so will ensure a smooth escrow and no after-sale problems. If you need an experienced agent to represent you in a sale or purchase, my contact information follows:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
GUESS WHO’S COMING TO DINNER: WILLARD!
HOME INSPECTIONS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
As summer gives way to fall, and far northern California sees a return of the rainy season, some may find they have been mistakenly caught in a sequel to Willard! Rodents akin to Ben, have been tunneling over the summer under fields and pastures common in the north state, and soon will seek a warm dry spot to relocate once rainy days arrive, flooding their burrows. It doesn’t matter if your abode is a humble bungalow or a stately mansion, as long as you have a warm attic filled with insulation ideal for a fluffy nest, you are a candidate for a rodent invasion by Ben and his friends.
Even if your home is perfectly built and maintained, there is probably an entry point for these rodents to invade your space. Sure signs include droppings along baseboards or in pantries, scratching noises in the ceilings or bits of insulation blowing out your air conditioning vents. If you have a mouser kitty, you may find a gift from your feline on your doorstep indicating rodents are in the vicinity, possibly looking to take up residence.
Eradicating a rodent infestation is fairly easy and inexpensive. Hire a reputable pest control firm to bait and trap these vermin. They will set and monitor traps on a weekly basis for two months for about $200. They handle all the fuss and muss of setting, checking, clearing and resetting the traps. So unless you love rats like Willard did, consider utilizing the services of a licensed pest control operator to wage this rodent war. Ernest wishes he had!
If you need a professional to assist and represent you in the purchase or sale of real estate, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
SHASTA COUNTY REALTORS ADOPT USAGE OF AVID
HOME INSPECTIONS, REAL ESTATE PRACTICE, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
What’s an AVID? It’s the latest and greatest form for Realtors who want to document a thorough inspection of a property they list or sell. Prior to this form’s release, agents were provided three lines on the Transfer Disclosure Statement (TDS). This was hardly enough room to note everything that should be documented on a typical property. Some agents developed local addenda or added blank sheets with additional findings.
The Agent Visual Inspection Disclosure (AVID) was released last year and is a 3-page form for use by buyer’s and seller’s agents. The first page highlights the limitations to our inspection, agents will not:
- Climb on the roof or into the attic
- Move furniture, pictures on walls or rugs
- Crawl under the house, move or look behind bushes, climb hills
- Operate appliances to determine functionality
- Measure square footage or lot size or identify boundaries
- Determine if the house has mold, asbestos, lead-based paint, radon, formaldehyde, etc
- Pull permits or inspect public records (this is the law by statute)
- Provide analysis or cause of a disclosed item or a cost of any possible repair
Furthermore, California law does not require an agent to inspect areas that are not reasonably and normally accessible, areas off site of the property, public records or common areas of condos, PUD’s and the like.
Agents are required to make a reasonably competent and diligent visual inspection of the readily accessible areas and report those findings in writing to prospective purchasers. This law applies to all residential real properties with 1-4 dwellings.
Surprisingly, some agents still do little more than write “agent recommends buyer obtain any and all inspections they deem necessary to satisfy themselves with property” on those three line of the TDS. This will get a plaintiff’s attorney salivating at the opportunity to grill that agent in a deposition to explain how the agent satisfied their inspection duty by making such a statement. This also puts the agent’s client at risk by failing to meet their statutory obligation to make a reasonably diligent inspection of the subject property.
I adopted usage of this form immediately. The form has blanks for each room of the home and sections for the exterior, yard and garage. I typically take whatever time is necessary to complete the form, bring it back to the office where I type it up nice and neat (my handwriting is terrible!), then provide it to the parties for review and signature.
By doing this, I am protecting my broker and clients from needless litigation by diligently completing my fiduciary responsibility to my clients. If I can be or service to you whether buying or selling, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
CHOOSE YOUR HOME INSPECTORS WISELY
HOME INSPECTIONS, INDUSTRY NEWS, REAL ESTATE PRACTICE, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
Over time, buyers have more and more relied on others to look out for them. During this same period of time, the pendulum has swung away from sellers warranting the properties they sell and placing that responsibility squarely on the backs of buyers. Buyers should be actively involved in selecting the items that should be inspected and the inspectors that will perform the inspections. Experienced agents will strongly advise buyers to exercise due diligence by using qualified, professional inspectors before committing to purchase the property. Beware: some inspectors learn their trade from a correspondence school!
The array of inspections depends on the property and items disclosed in the myriad of disclosures the agents and seller provide the buyer. At a minimum, most properties should have a pest and home inspection. They sound the same but are quite different. The pest inspector is looking for wood destroying pests including insects and fungi. They are not concerned with the remaining life of the roof, electrical problems, foundation issues, function of HVAC, appliances, water heater safety or any of the other parts of the structure that may have problems. Those items fall within the scope of the home inspector.
Since there are no licensing requirements for home inspectors, choose your inspector carefully. Competent inspectors hold 1 or more contractor licenses. The best have experience in construction, electrical, plumbing and roofing. They belong to one of the professional organizations such as CREIA or ASHI. They know the building codes, in some cases, better than city and county inspectors. Regardless of a homes age, it should be professionally inspected. New homes, in particular, should be inspected by a home inspector but not a pest inspector.
The home inspector may recommend further inspection by electricians, roofers, plumbers, engineers, HVAC contractors and chimney/wood stove experts. Homes with a pool and/or spa should be inspected by professionals in that field. Country properties with well and septic systems would necessitate additional inspections. Surveyors are sometimes hired to locate property corners or review title report issues involving easements or legal descriptions.
Here’s a rundown of what inspections cost and who usually pays:
- Pest inspection-buyer or seller- $80-$100
- Home inspection-buyer $225 and up depending on size of home
- Pool and/or spa-buyer-$95 and up
- Septic-seller-$350 and up depending on tank size
- Well-buyer- $25-$1000 depending on thoroughness
- Chimney-buyer-$75 and up (get it cleaned as part of inspection)
- Roof- buyer-$50 and up(higher if you want a written warranty of lifespan)
- Surveyor-buyer and/or seller-$300 and up, depending on work required
- HVAC-buyer-$50 and up-get the unit serviced for a few dollars more
- Engineer-buyer and/or seller-$300 and up depending on issue at hand
Once the inspections are completed, the buyer has the right to negotiate repairs and/or a price adjustment to address items of concern. The standard of care in the Redding/ Shasta County area is to focus on health and safety issues. Cosmetic items, and items easily observable by the buyer at the time(s) the buyer viewed the property prior to writing the offer, are usually not negotiated. The buyer can cancel the purchase agreement if a mutually agreeable resolution is not reached with the seller, and have their deposit refunded, less any cost for inspections or escrow/title report fees.
Since the sale of real estate is “as is” in California, it has never been more important for a buyer to exercise their contractual rights to investigate every aspect of the property they wish to purchase. If you desire expert representation, whether buying or selling, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
DON’T LET BUYING A HOME WITH A SEPTIC SYSTEM GET STINKY
HOME INSPECTIONS, REAL ESTATE LEGISLATION, TIPS FOR SENIORS
Once you leave the city limits, it is very common to find homes for sale with private sewage disposal systems. These are known as septic systems. Each system is designed to serve a specific size home based on soil conditions at that home site. Depending on the soil depth and type, septic systems may be standard or engineered. The cost difference to install and maintain an engineered system can be substantial.
Standard systems consist of a concrete tank buried in the ground with inlet and outlet pipes near the top of each end of the tank. The top of the tank has two removable lids that provide access for periodic pumping. The outlet pipe leads to a leach field that consists of perforated PVC pipes laid in trenches filled with gravel. The leach pipes are usually buried only 1-2 feet deep. The liquids that are pushed into the leach field percolate into the ground and/or evaporate from the surface soil.
Engineered septic systems can cost as much as $50,000 for a large home. Some require dirt to be imported to create a mound if the native soil does not percolate adequately. Pit leach fields are used in parts of Tehama County. Large holes are dug deep into the ground and filled with small stones. This replaces the conventional leach field. Sand filters and other more complex systems have been developed to address sewage disposal on some properties with shallow or hardpan soils.
It is the standard of practice in this area to ask the seller to have the septic system pumped and inspected by a licensed septic service company. The cost is $350-$500 depending on the gallons pumped. Most tanks range from 1000-2000 gallons. The size is usually based on bedroom count. Once the tank is pumped, the tank is inspected for cracks, broken inlet or outlet pipes and leach field functionality. A leach field failure is usually indicated when liquid flows back from the leach field into the tank after the tank has been emptied. The leach field can fail due to the leach pipes becoming clogged or broken (don’t drive over your leach field), a rise in the water table or poor soil conditions.
California is in the process of developing statewide septic regulations. Currently, septic systems are approved and regulated by county environmental health departments. Once these regulations are implemented, minimum soil depths of 4′ will be required to bedrock or a water table in order to obtain a septic permit. All septic systems would have to be pumped and certified every 5 years. Septic repairs may require state approval. Budget problems in California have slowed the creation of the new bureaucracy that will implement these regulations.
I have only scratched the surface with regards to issues surrounding septic systems. If you have any questions, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
USE DUE DILIGENCE WHEN BUYING A HOME WITH A PRIVATE WATER WELL
HOME INSPECTIONS, REAL ESTATE PRACTICE, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
The Greater Redding/Shasta County area has many homes with private wells as their only source of water. Due to a wide diversity of geology in this part of California, water wells can produce anything from copious quantities of clean, clear water to limited amounts of brackish water needing treatment to be drinkable. Experienced Realtors know which areas have challenged wells and those that produce plentiful quantities of good, potable water.
Forget the age old question “How many gallons per minute (GPM) does the well produce”? GPM is determined more by the horsepower of the pump than the productivity of the well. A recovery rate test is a more accurate gauge of a well’s capabilities. This test should be performed by a qualified well inspector. This involves measuring the water level in the well before and after a prolonged pumping lasting several hours. Wells in some locales would fail this test miserably because they only produce 1-2 GPM. These properties typically have large water storage tanks capable of keeping several hundred gallons of water on hand to meet household needs. The toughest areas for wells must haul water during the dry months of the year. The best wells can endlessly produce several hundred gallons per minute.
Some areas have issues with high levels of salt, iron or sulphur. Filters can remove most of the minerals which makes the water more aesthetically pleasing and less odoriferous. Other homes in my market area are served by open water ditches that provide specific quantities to property owners with adjudicated water rights. To make the water potable, treatment with chlorine or UV light filtration systems is necessary.
Depths of wells vary dramatically. The minimum is usually 100′ though the static water level may be only 10-15 feet below the ground. Wells are cased for the first 30-50 feet to prevent rodents from entering the well shaft. Other areas have wells that are more than 400′ deep. These variables determine the cost to pump water and, in turn, the cost for electricity to lift the water from the well.
Homebuyers in this area usually select and pay for the inspector and dictate the items to be inspected. The cost can be as little as $25 for a simple potability test to more than $500 for a thorough inspection and recovery test. Add several hundred dollars more if you want the water tested for trace contaminants. Hardness, pH, alkalinity and iron levels can also be checked.
Water is a vital factor in determining a property’s value and desirability. Be certain to have a knowledgeable real estate professional representing you when purchasing a property served by a private well. Failing to thoroughly investigate a water well can be a costly mistake. Contact me if I can answer any questions or be of assistance in any real estate purchase or sale:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY REAL ESTATE EXPERIENCE
SHOULD I BUY THAT MOLDY HOUSE?
HOME INSPECTIONS, REAL ESTATE LEGISLATION, REAL ESTATE PRACTICE, TIPS FOR BUYERS, TIPS FOR SELLERS
House with Mold
Mold has been a hot button topic ever since Ed McMahon, jocular sidekick to Johnny Carson, sued his insurance company claiming his moldy Beverly Hills mansion was making him and his family ill. This March, Ed was in foreclosure and trying to sell the home in a hilltop gated community for more than $6 million. He blamed his financial difficulties partly on the mold issue that required expensive remedial renovations to the 6-bedroom, 5-bathroom home and the costly medical problems that ensued, allegedly from mold exposure. The publicity this case generated resulted in copycat claims that have insurance companies running scarred.
California responded to these concerns by passing the Toxic Mold Protection Act of 2001. The act directs government agencies to study indoor mold and set Permissible Exposure Limits (PEL’s). In 2005, a report titled Implementation of the Toxic Mold Act of 2001 was published. Scientists concluded “that although recent studies have strengthened the evidence between living or working in a damp environment and increased risk for respiratory symptoms, the role of mold growth in these complex environments is still unclear“. Damp buildings also encourage the growth of bacteria, dust mites and cockroaches, as well as degradation of wet building materials that can also release irritant chemicals indoors. Thus, PEL’s cannot be established at this time for indoor molds.
A seller of a 1-4 unit property is required to disclose whether they are aware of mold or any other environmental hazard including asbestos, formaldehyde, radon gas, lead-based paint and fuel or chemical storage tanks that affects the property. If a seller is aware mold is present on the property, answer yes on the Transfer Disclosure Statement and clarify, to prevent confusion, that he or she does not know if it is an environmental hazard. Only a mold expert, after sampling and evaluating a specimen, can determine if it is a strain of mold known to be toxic. The seller has no obligation to remedy a mold problem, only disclose the presence of same.
One precaution a seller can take is to provide the buyer a booklet titled “Environmental Hazards: A Guide for Homeowners, Homebuyers, Landlords and Tenants”. Giving a buyer this booklet is optional, but it is one I have made available to all my sellers. The sellers sign the booklet acknowledging providing the booklet, and the buyer signs the booklet to acknowledge receiving it. Providing the booklet does not relieve the seller of the obligation to disclose known environmental hazards.
The jury is still out as to possible health hazards associated with mold exposure. Further regulations may change seller’s obligations regarding mold infestations. I take the time to keep abreast of law changes that impact real estate practices. If I can assist you with any real estate matter, provide a free market analysis of your real estate holding, locate a real estate professional in another area or assist you in purchasing a property, contact me at:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REAL TOR/BROKER
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOACL REAL ESTATE EXPERIENCE
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