Home warranty nightmare erupts over broken furnace

DEAR BOB: About four months ago we bought our first home. Itwas built around 1930 in a very charming older neighborhood with great schoolsfor our two kids. Although we probably bought the cheapest home in the firstclass school district, we are glad we did. However, we have a big problem withour home warranty company. Our home seller paid for a one-year home warrantypolicy, which we understand cost her around $450. Within a week or two, thefurnace gave off a bad odor. We phoned the home warranty company, which sent arepairman the next day. He said the furnace was in very bad condition and gaveus a written warning not to operate it. Because the weather was cold, we had toact quickly. We expected the home warranty company to either fix the furnace orinstall a new one. But the warranty company denied liability since the furnacewas a “pre-existing condition.” Because we were desperate for heat,we bought a new furnace, which cost us almost $5,000 installed. The warrantycompany refuses to pay anything. Do we have any recourse? –Vince R.

DEAR VINCE: Yes. You should sue that home warranty company.Depending on the local Small Claims Court jurisdiction, you can either suethere or in the local court of general jurisdiction for reimbursement.

Purchase Bob Bruss reports online.

Home warranty companies are notorious for denying policycoverage by stating a claim was an excluded pre-existing condition, especiallyfor large claims like yours. These warranty companies are the “pros”and homeowners like you are the “amateurs.” They know that so theyoften deny legitimate claims like yours, realizing most homeowners just go awayand never sue them.

You should report this matter to your state insuranceregulator. Unfortunately, home warranty companies are very loosely regulated inmost states so they continue to get away with denying policy coverage falselybased on a “pre-existing condition.”

PROTOCOL FOR CHOOSING REALTY AGENT TO LIST HOME FOR SALE

DEAR BOB: What is the protocol procedure for choosing a realestate agent to sell my house? Is it OK to interview maybe three agents and letthem know I will choose among them? If I am dissatisfied with the agent I choose,am I stuck with him or her or can I “fire” that agent and chooseanother? –Check W.

DEAR CHECK: Yes, you should interview three (or more)successful realty agents who sell homes in your vicinity. They won’t mind thecompetition because they know smart home sellers interview several agentsbefore selecting the best.

However, after you sign a listing with an agent, you arestuck with that agent for the listing term. That’s why I suggest signing anexclusive right-to-sell listing for no longer than 90 days. If you checked theagent’s references of recent home sellers in your area, you can be confidentthe agent will do a good job.

However, if your home doesn’t sell within the 90 days, thenyou can either renew the listing for an extra 30 days, or let it expire andrelist with a better agent.

The only valid legal reason to cancel during the listingterm is the agent’s lack of “due diligence.” If that should happen,contact the listing agent’s office manager or broker to ask your listing betransferred to a better agent within the same firm for the remainder of thelisting term.

WHERE TO FIND PROFESSIONAL HOME INSPECTORS

DEAR BOB: In the past you mentioned a Web site forprofessional home inspectors. My mom is moving from her home she has enjoyedfor 47 years. We need help getting the home prepped for sale. Where can we finda reliable home inspector? –Elwood H.

DEAR ELWOOD: You and your mom are very wise to obtain aprofessional home inspection before listing the residence for sale. Inaddition, you might want to obtain a professional pest control (termite)inspection, unless your mom’s house is in Alaska.

I often recommend the Web site of the American Society ofHome Inspectors (ASHI) because they have the toughest membership standards forprofessional inspectors. You will find it at www.ashi.orgor by calling 1-800-743-2744 where local ASHI members can be located.

By having a professional home inspection before listing thehome for sale, your mother can either have the home defects repaired or she cansimply disclose them to prospective buyers so they are fully aware beforemaking a purchase offer.

LAW OF FIXTURES SOMETIMES ISN’T CRYSTAL CLEAR

DEAR BOB: Thanks for your recent article about when homefixtures are included in a home sale. I loved the story about your motherscreaming when the sellers had removed the chandelier in her condo, but I’mglad there was a happy ending. My fixture issue involves the recent sale of myhouse. Two years before the sale, I remodeled the kitchen extensively. Iinstalled a Sub-Zero refrigerator, which had a front panel that matched the newcabinets. Nothing was said in the sale contract about the kitchen appliances,so I unplugged the refrigerator and had it moved to my new condo. It was notbuilt in and the movers easily pulled it out. However, the buyers quicklyyelled and screamed. They thought the refrigerator was included in the salebecause the front panels matched the cabinets. We’re talking about arefrigerator worth around $4,000. My buyers want me to either return therefrigerator, buy them a new one, or they will take me to court. What should Ido? –Irene W.

DEAR IRENE: Your situation is known in fixture law as a”gray area.” Neither you nor the buyers are 100 percent correct. If thebuyers wanted the refrigerator included in the sales price, they should havespecified it in their purchase contract.

As you probably know, a fixture is former personal propertythat, by means of permanent attachment to the structure, has become part of thereal property. Examples include light fixtures, built-in appliances such asdishwashers and ovens, and custom permanently attached stereo speakers.

Although the front panels on your upscale Sub-Zerorefrigerator matched the cabinets, that doesn’t make it an installed fixturethat transfers ownership with the house. However, if it was built in to thehouse, as many upscale refrigerators are, then the buyers have a strongargument the refrigerator was a permanently attached fixture, which is includedas a fixture with the house.

WHAT HAPPENS WHEN A JOINT TENANT OWNER DIES?

DEAR BOB: If there are three joint tenants with right ofsurvivorship, when one joint tenant dies, do the other two owners remain asjoint tenants with right of survivorship? Or does the ownership revert totenants-in-common? I asked title insurance company officers, and an attorneywith the state association of Realtors, but no one knows for sure. Whathappens? –Robert H.

DEAR ROBERT: I am shocked. Any savvy first-year law schoolstudent knows that when one joint tenant with right of survivorship dies, thesurviving joint tenants receive the deceased joint tenant’s share.

In your situation, the three joint tenants each owned anundivided one-third interest in the property. After one joint tenant died, thetwo surviving joint tenants each own a one-half interest as joint tenants withright of survivorship.

The ownership does not become a tenancy-in-common after onejoint tenant dies.

However, in most states, the surviving joint tenants mustrecord with the local recorder of deeds (1) a certified copy of the deceased’sdeath certificate, and (2) an affidavit of survivorship. Because theindividuals you consulted obviously have no clue, please consult an experiencedlocal real estate attorney for more details.

CAN A CREDITOR RECORD A LIEN AGAINST HOME?

DEAR BOB: My domestic partner and I own our home. During arecent mortgage refinance investigation, it was discovered a lien was placed onour home by an auto finance company. Is it legal to place a lien on theproperty without notification? Can I file a lawsuit to have the finance companypresent a bill of sale to the vehicle? –Gilberto A.

DEAR GILBERTO: As a general rule, a creditor cannot record alien against a real estate title unless that creditor has obtained a courtjudgment against the debtor and property owner.

Even if an invalid lien is recorded against a propertytitle, the title insurer will always be very cautious before issuing a titleinsurance policy.

Anyone can sue anyone. However, there are serious penaltiesfor bringing groundless lawsuits. There are also slander-of-title penalties forrecording invalid liens.

Before you sue the auto refinance company to clear thetitle, please make a phone call to find out what’s going on. Be very politebecause resolving the issue on a friendly basis is usually far better andcheaper than a lawsuit. For more details, please consult a local real estateattorney.

The new Robert Bruss special report, “How to Obtain theBest Appraisal of Your House or Condo,” is now available for $5 fromRobert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this columnare welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

Copyright 2006 Inman News

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