2023 Real Estate Closing Attorney – Problems and When Not to Close

An experienced real estate closing attorney at Whitney, LLP can provide legal advice regarding when a Buyer is justified in not going to closing. We have experience representing Maryland homebuyers who discover problems and no longer want to proceed to closing.

Even after serious problems are discovered, Buyers are often given excuses and pressured by both their own real estate agent and broker, as well as the seller’s agent and broker, to “close now” and deal with the issues later.

However, Buyer’s have legal rights and can enforce their contractual rights which may allow them to not go to closing and recover their earnest money deposit.

If you need a real estate closing attorney to fight for your rights in Maryland, contact Whitney, LLP. We represent homebuyers and property buyers across Maryland.

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Problems Discovered After Signing

After the Contract is signed by both parties, the Buyer may learn important information about the Property that was not disclosed. The Seller’s failure to disclose material facts about the condition of the Property may provide a legal basis to declare the Contract void and of no legal effect.

Other times, the Seller may not comply with the terms and conditions of the Contract. This may constitute a default and provide for unilateral termination of the Contract and return of the Deposit.

False or Incomplete Information Supplied by Seller

Maryland law requires a Seller of residential real estate to provide a Property Disclosure Statement or Property Disclaimer Statement. Prior to making an offer, the Buyer must be provided with a copy of the Statement to consider in deciding whether to make an offer in reliance on the information set forth in the Disclosure or Disclaimer Statement.

Disclosure Statement

When a Seller elects to provide a Disclosure Statement, the Seller attests to having personal knowledge about the condition of the Property and must answer 19 separate questions concerning the Property including any history of water infiltration, condition of plumbing, structural defects, termite infestation and termite damage, and many other important aspects of the Property.

If improvements were made to the Property, Seller must disclose whether the required permits were pulled. The Seller must respond to each question with a “Yes,” “No,” “Unknown” or “Inapplicable.”

False Disclosure Statement

One example of a false disclosure is a Statement that denies knowledge of prior termite infestation or termite damage. The Buyer may come to find out through a Wood Destroying Insect (“WDI”) Inspection that there is visible evidence of termite damage or evidence of past treatment.

In some instances, the Seller fails to determine the scope of hidden damage and fails to have a licensed contractor to perform repairs. Other times, inadequate repairs are made and concealed behind newly installed and painted drywall.

Other examples include falsely denying a history of basement flooding, mold or falsely representing that the Property has public sewer when in fact it has a failed septic system.

False Disclaimer Statement

A Seller may falsely deny actual knowledge of a latent defect, which is defined as a condition which creates a risk to safety or health if the defect is not visible upon reasonable inspection.

For example, the Seller may be aware of hidden structural damage due to termite infestation, or a failed septic system or abandoned underground oil tank.

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Contract Terms and Conditions

The Contract of Sale typically provides that “time is of the essence,” and that failure of the Seller to comply with terms or conditions is grounds to terminate the Contract upon written notice.

A Seller may agree to a WDI Inspection, but when evidence of termites is found, may refuse to provide access for a qualified structural professional to evaluate the scope of damage and need for repair. Such an evaluation requires opening walls, ceilings and flooring or siding, as needed to determine the extent of damage. Such a refusal constitutes a breach of contract and grounds for termination.

Return of Deposit

The typical Contract provides for return of the deposit if the Seller breaches the Contract. For the escrow agent to return the deposit, both parties must sign a Release Agreement directing the escrow agent to refund the deposit.

Whitney, LLP’s experienced real estate closing attorneys have experience recovering Buyers’ deposits after Buyers decide to exercise their contractual to cancel the Contract and not proceed with closing.

“AS-IS” Addendum

A Contract may provide for the Property to be sold “AS-IS” without the right of the Buyer to terminate based on the results of a home inspection by a licensed home inspector, or a WDI Inspection by a licensed pest control contractor or any other number of inspections (e.g., mold, radon, septic). Even in a very competitive market, it is very ill advised for a Buyer to agree to such a contract provision.

Instead, Buyer should bargain for an “AS-IS” provision that provides for the absolute right to terminate the Contract, upon written notice, if the Buyer is dissatisfied with the results of any inspection.

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Bad Advice and Pressure from Real Estate Agent

Unfortunately, some Buyers are incorrectly told by their agent, despite owing a fiduciary duty of utmost loyalty, that they must go to closing once the Contract is signed, regardless of the Seller’s false information or Seller’s failure to comply with the Contract. In this regard, the agent may not be acting in the Buyer’s best interests and/or may be providing legal advice which is improper and incorrect.

While Buyers can file a complaint against their real estate agent, that does not help the Buyer deciding whether to proceed to closing, or not.

Whitney, LLP’s real estate closing attorneys have experience guiding clients who are being misled by real estate agents and brokers who do not understand the contractual obligations of both parties.

daniel whitney jr daniel whitney sr - 2023 Real Estate Closing Attorney - Problems and When Not to Close — Daniel W. Whitney, Jr. and Daniel W. Whitney, Sr. of Whitney, LLP

Whitney, LLP – Real Estate Closing Attorney Advice

Once a Contract is signed, Buyers may feel pressured to go to closing. However, there may exist sound reasons to terminate the Contract. An experienced real estate closing attorney can provide advice on whether the Contract can be terminated and thereby avoid a financial disaster by closing on a Property requiring major repairs.

If you have discovered problems with a property prior to closing, call Whitney, LLP’s real estate attorneys.

Call us at 410 583 8000, or use our Quick Contact Form, to discuss your potential case.

We represent clients across Maryland.

House Flipper Hidden Defect $90,000 Settlement

A house flipper in Middle River, Maryland finally got serious and paid $90,000 once our client hired a real estate attorney with Whitney, LLP. After the house flipper was confronted with the fact he did not pull permits and hid water intrusion and structural damage, he chose to settle the case rather than litigate. Whitney, LLP was hired by the home buyers to provide representation after our clients moved in, immediately began experiencing problems and their concerns were not taken seriously by the flipper.

Home buyers that consider flipped houses should be aware flippers often do not pull permits, use unlicensed and inexperienced contractors, and often hide defects in order to make more money.

If you need a real estate attorney, Whitney, LLP bring claims and can sue Maryland house flippers to recover money for home buyers to fix hidden and undisclosed problems.

From Dream House to Money Pit In a Week

Before deciding to purchase the home, our clients looked at over 50 homes. They had a unique home search criteria due to a multi-generational living situation, as well as mobility requirements due to health issues.

After months of searching, they found what they believed met their needs, and at a price they could afford. The house was advertised on Redfin as being fully renovated, with many pictures showing a refinished basement, new kitchen and other desirable features.

Within a week of moving in, the problems began. Electrical problems were the first problems to arise. Fuses began to blow under normal use, causing our clients to call an electrician.

Discovered Flipper Did Not Pull Permits

The electrician discovered that the flipper did not pull any permits for the electrical work that had been performed. They contacted the flipper, who denied that he had done anything wrong. However, the problems with their flipped house were just beginning.

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House flippers that hide water leaks cause mold to grow.

Water Intrusion in the Basement

A few months after moving in, the new home owners discovered water pouring into the basement during a heavy rainstorm. They hired a contractor to fix the water intrusion. The contractor removed a large amount of drywall to the right and left of the area of water intrusion, and discovered signs of pre-existing mold and previous water intrusion.

New Drywall Over Pre-Existing Damage

More drywall was removed in order to determine the extent of the mold and water damage. While doing this, the contractor found that new drywall and new 2×4’s had recently been installed. This work appeared to have been done by flipper in the same areas that the pre-existing problems were located.

House Flipper Hidden Defect – Structural Damage

The new drywall also covered up cracks in two different walls on the the concrete block structural wall in the basement. Both walls were obviously cracked. The walls were also bowed in, causing additional structural defects that needed to be fixed.

Expensive Repairs

The contractor who gave them a significant quote to repair the water intrusion, mold and structural defects hidden by the flipper. The contractor also recommended they find a lawyer to sue the house flipper. Our client eventually realized they needed professional representation, searched for a real estate attorney, and hired Whitney, LLP.

Bringing Claims Against a House Flipper

Whitney, LLP’s attorneys contacted the house flipper. The house flipper then hired an attorney. The parties agreed to go to mediation, which was required as part of the Residential Contract of Sale. However, the mediation was not successful. Our clients decided to proceed with filing a lawsuit against the flipper.

House Flipper Hidden Defect $90,000 Settlement

After the unsuccessful mediation, but before the lawsuit was filed, the attorneys continued to negotiate. The flipper agreed to pay $90,000 to avoid the house flipper hidden defect lawsuit. The $90,000 covered the cost of repairing the hidden defects and attorney’s fees. Of course, all claims are different, and past results do not guarantee future results.

Daniel W. Whitney, Sr. and Daniel W. Whitney, Jr. of Whitney, LLP

Real Estate Attorney to Sue House Flippers – Whitney, LLP

If you have been taken advantage of by a house flipper with hidden defects, you may be able to recover compensation.

Our real estate attorneys represent Maryland home buyers and can help buyers fight back against greedy house flippers that do not pull permits and hide serious defects.

We offer Legal Consultations to Home Owners

Call Whitney, LLP’s real estate attorneys at 410 583 8000, or use our Quick Contact Form, to discuss your potential case.

First Time Homebuyers Recover $112,000

Whitney, LLP obtained a $112,000 settlement on behalf Maryland first time homebuyers who decided to sue their real estate agent after discovering termite damage to their home five years after closing. First time home buyers rely heavily on their real estate agents to guide them through the home-buying process. However, some real estate agents fail to make the required disclosures.

When real estate agents fail to comply with their duties, they can be held responsible for their clients’ damages. Whitney, LLP’s attorneys help buyers sue real estate agents for negligence and other failures.

First Time Homebuyers Sue Real Estate Agent and Pest Control Company, Recover $112,000

First time homebuyers trust their real estate agent to guide them through the stressful and complex process of buying a new home. The buyer’s agent owes a fiduciary duty to protect the best interests of the agent’s clients. This includes the duty to advise the buyer about the differences between the Home Inspection by a licensed home inspector, and a Wood Destroying Insect (“WDI”) inspection by a licensed pest control company. Agents must also be familiar with the reporting format of a WDI inspection.

The WDI Inspection Form

By Maryland law, the results of the careful visual inspection for termites, powder post beetles and carpenter ants must be reported in writing on a standardized MD-1 form. If the inspector finds evidence of wood destroying insects, Box B on the form must be checked.

Termite Treatment

When evidence of termites is found, the pest control company will recommend treatment, which the Seller will typically pay for. Real estate agents know or should know that treatment is only step one of a two-step process. The second vital step is evaluation of the termite damage. It is a near certainty that termite damage exists if there is a termite infestation. Termites eat wood and are very destructive.

The Scope of Termite Damage Must be Evaluated

The WDI inspection does not undertake to identify all termite damage or provide a report on structural integrity. A small location of visible damage may be the tip of the iceberg. Massive damage may be hidden behind the walls or beneath the surface of the flooring.

For this reason, the MD-1 form contains a recommendation to the buyer that applies when Box B is checked. The recommendation is for a qualified structural professional to evaluate the scope of damage, including hidden damage, and the need for repairs. To find out just how bad it is, this kind of evaluation requires opening walls and other suspect areas.

A WDI Inspection Was Performed But Agent Did Not Disclose Results

In this case, a WDI Inspection was performed and evidence of termites was found. The Seller agreed to pay for treatment, and our clients thought nothing further needed to be done. They went to closing with peace of mind; however, they were not provided a copy of the MD-1 report to sign which attests to the Buyer receiving and understanding the MD-1 report.

Instead, the Buyer’s agent merely provided our clients with a copy of the pest control company’s invoice which contained a “detailed summary” of the findings and recommendations. Although the invoice accurately noted the finding of termites and the recommendation for treatment, it omitted the MD-1 recommendation to obtain an evaluation of damage. As our clients later found out, if an evaluation had been performed, major termite damage would have been found, and they would have terminated the Contract of Sale. Our clients were not familiar with the MD-1 reporting format, and thought that the description on the pest control invoice was the WDI inspection report. Our clients decided to sue their real estate agent given their agents’ failure to make a full disclosure.

Five Years Later, Termite Damage Was Discovered

About five years after living in what they thought was their dream home, they discovered suspicious “dirt” in the basement beneath a joist. A pest control company then confirmed an active termite infestation, and major damage was uncovered. Our clients further received shocking news concerning the pre-closing treatment.

The Pre-Closing Treatment Was Not Performed as Described

A forensic investigation by pest control expert retained by Whitney, LLP determined that the pest control company had failed to drill holes around the perimeter of the house that were necessary to inject termiticide into the ground. Although the pest control company had charged for the service, the complete treatment had not been performed.

The Real Estate Agent and Pest Control Company Settled

The lawyers of Whitney, LLP overcame a statute of limitations defense, and built a case that the agent was negligent in not providing the MD-1 report, and that the pest control company was negligent in not performing the treatment that it had represented was performed. Despite the denials of liability, the case settled for $112,000.

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Daniel W. Whitney, Sr. and Daniel W. Whitney, Jr. of Whitney, LLP

Lawyers for Maryland Home Buyers

Whitney, LLP’s attorneys represent Maryland home buyers, and help buyers sue real estate agents in a variety of cases involving agents on both sides of the transaction, undisclosed termite damage and hidden defects.

We have experience recovering compensation that allows home buyers to fix serious problems discovered after closing

We offer Legal Consultations to Home Owners

Call Whitney, LLP’s real estate attorneys at 410 583 8000, or use our Quick Contact Form, to discuss your potential case.

Here is our YouTube Channel for our videos on real estate issues and termite damage.

WARNING TO MARYLAND HOMEBUYERS!

Maryland realtors use a form residential contract of sale (“Contract”) produced by the Maryland Association of Realtors (“MAR”) that bears scrutiny. It contains a clause that makes the homebuyer responsible for the realtor’s attorney’s fees under certain circumstances. All agents and brokers in Maryland use either the MAR or the Greater Capital Area Association of Realtors (“GCAAR”) Contract. The GCAAR Contract contains a similar provision. For the sake of simplicity, the MAR Contract is addressed, with the understanding that the same analysis applies to both types of Contracts.

Liability for Realtor’s Attorney’s Fees

If a dispute arises between the realtor and its homebuyer client, the Contract modifies the usual Maryland law that each party pays for its own legal fees. The MAR Contract contains a provision, buried in the middle of the 11-page Contract, that says its client must pay the realtor’s legal fees if the realtor prevails in the litigation.

Litigation Against Realtors

Realtors typically aggressively defend when sued by dissatisfied clients. These deep-pocketed defense efforts are funded by the broker’s E&O insurance company. This could result in the court awarding legal fees against the realtor’s client in an amount greater than the cost of the purchase price of the home. This could happen even if the homebuyer proves fraud by the preponderance of the evidence. Typically, homebuyers lack the financial resources to pay such a judgment, which can lead to financial ruin. Is this fair, or do realtors intentionally use this hidden fee-shifting contract provision to punish or discourage its clients from seeking a legal remedy for the negligence or fraud of the realtor?

The MAR Contract Favors Realtors.

Realtors have a legitimate business interest in discouraging its clients from filing suit and recouping its legal fees when it prevails, but how about the homebuyer? Does the MAR residential contract of sale provide the homebuyer with the same protection? If the homebuyer painstakingly reads the Contract and parses the language of the attorney’s fees clause, the homebuyer will learn that the realtor is not obligated to pay the homebuyer’s attorney’s fees if the homebuyer prevails against the realtor. In other words, the contract provision is wholly one-sided, in favor of the realtor to the detriment of realtor’s client.

The lopsided contract of sale provision is typically not highlighted or brought to the attention of the client. As a form contract used by the real estate industry in Maryland, as a practical matter, it is not subject to negotiation. Clients who encounter a problem after closing, who may wish to pursue a legal remedy against a negligent agent, rightfully feel that this one-sided contract provision has been slipped-in to their detriment.

No Consumer Protection Act Remedy

The aggrieved homebuyer may not seek attorney’s fees under the Maryland Consumer Protection Act (“MCPA”), because the MCPA exempts realtors from its remedies for deceptive and unfair trade practices.

Adverse Impact on Homebuyer

One example of how detrimental this can be arises out of the agent promising the client that he will arrange for the Wood Destroying Insect (“WDI”) Inspection. This inspection is critical for protection of the homebuyer. Yet, due to admitted negligence, the agent fails to arrange for a WDI Inspection, and informs the client that everything is ready for closing. After the client moves into his new home, he discovers major termite damage which would have been discovered during a typical WDI Inspection by a licensed pest control inspector. According to one estimate, the cost of repair exceeds the value of the house. This magnitude of damage would have allowed the homebuyer to terminate the Contract and get his deposit refunded.

The homebuyer files suit against the agent who admits to having failed to order the WDI Inspection but raises a defense, unique to Maryland and about two other states, that the suit is barred by the homebuyer’s contributory negligence. Based on this defense, the agent aggressively defends, attends a court-ordered settlement conference and, despite his negligence, offers zero to settle. The case proceeds with the agent attempting to pressure the homebuyer into dismissing the case to avoid exposure to legal fees. As the case progresses, the agent’s legal fees actually exceed the purchase price of the home, thereby missing the opportunity for an early settlement for half that amount to pay for repairs. Because of the one-sided attorney’s fee clause, the agent feels no pressure to avoid payment of the homebuyer’s attorney’s fees if the homebuyer prevails. The lack of mutuality can destroy the usual dynamics of settlement negotiation. The agent’s attorney may actually gloat that he has a track record of defending cases for a particular high profile real estate brokerage notorious for scorched earth litigation tactics, where six-figure attorney’s fees have been granted for the prevailing broker, leaving one to surmise that the broker’s former clients, if ordinary people with large mortgages, faced financial ruin.

The Duties Owed By Realtor Are Ignored.

Under Maryland law, real estate licensees (including agents and brokers) owe their clients a duty of honesty, good faith, reasonable care and due diligence; and must disclose material facts about a property which they know or should know. Moreover, real estate licensees owe a duty of loyalty to the client. The typical Buyer Brokerage agreement further provides that the agent and broker will represent the interests of its client. Maryland case law describes the agent and broker as a fiduciary. Despite these duties, the MAR Contract takes unfair advantage of homebuyers who are not expecting the agent and broker who represent their interests to include such a provision in the Contract they have to sign to purchase their home.

Corrective Legislation is Needed.

The one-sided fee-shifting provision in residential contracts of sale is contrary to public policy. Such predatory behavior should be addressed by corrective legislation. Either the provision should be declared void by law or it should be modified to apply to whoever prevails in order to put the agent and homebuyer on an equal footing.

Is Litigation Viable?

When a homeowner faces major economic losses due to the negligence or fraud of the realtor, experienced counsel must evaluate the strength of the case and likelihood of success. This requires an investigation of the facts and assessment of any legal issue that might be raised in defense. With an understanding of the potential risks and benefits, litigation may be the only option to obtain compensation to repair and restore the home.

Whitney, LLP represents homebuyers in claims and litigation against negligent and dishonest real estate agents, and those that commit fraud. Contact our office for a Legal Consultation at 410 583 8000 or use our online Quick Contact Form.

The Termite Inspector Missed Termite Damage

Watch the Video Below: When the termite inspector missed termites and termite damage in a new house, our lawyers for missed termite damage can help. Negligent termite inspections are a huge problem in Maryland, resulting in new homeowners often finding expensive, hidden termite damage after closing and moving in. Termite damage repairs are usually thousands of dollars, and can get even worse as the full extend of termite damage is exposed once work begins.

Whitney, LLP’s termite damage lawyers help homeowners in Maryland who find termite damage after moving into a new house. Compensation can include the cost of termite damage repairs as well as emotional distress.

Click Here to read about Whitney, LLP’s past termite damage settlements.

Click Here to read our blogs about hidden termite damage and negligent termite inspection cases, including settlements and lawsuits we filed.

We offer Legal Consultations to Home Owners. Call Whitney, LLP at 410 583 8000, or use our Quick Contact Form, to discuss your potential case. Here is our YouTube Channel for more videos on termite damage and termite legal issues.

Termite Inspector Missed Termites Before I Bought My House

Edited Transcript of Video:

Hi, this is Dan Whitney with the Whitney Law Firm in Towson, Maryland. Today, we’re going to talk about the issue of the termite inspector did not find termites before I bought my house. So I’ve been a lawyer for about 10 years, and part of my practice is termite damage and termite infestation claims.

Negligent Termite Inspection Before Closing

Missed termite damage and termite infestation claims claims usually arise in connection with somebody purchasing a house, and a termite or WDI, wood destroying insect, inspection is performed, and no termite or termite damage is found.

In other words, no termites and no termite damage is found and the new owners move in. What happens when the termite inspector misses termite damage and then the new owner moves in and they find the damage? Very often, the owner feels stuck because termite damage can be extremely widespread and termite damage repairs can be very expensive.

Fortunately, compensation can be recovered from a negligent termite inspection company to cover the cost of repairs.

Expensive Repairs for Hidden Termite Damage

It’s extremely hard to figure out the extent of the missed termite damage in a home without ripping out floors, ripping off drywall, removing kitchen cabinets and all sorts of invasive maneuvers to determine the extent of the damage.

If the termite inspector did not find damage that they should have found, the homeowner has legal rights, and the cause of action that we often allege against a negligent termite inspection company is that there was negligence in the inspection.

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Termites damage in a client’s house that was painted over to hide it before the sale.

Signs of Termite Damage During an Inspection

A Negligent Inspection simply means the termite inspector did not find damage that a reasonable inspection would have detected. So the question becomes, if they were negligent, what is it that they should have seen that you’re saying they missed?

So typically, there’s a number of signs of termite infestation. One, termite damage looks a certain way and should be able to be seen with the naked eye and or using a flashlight, that should be detected. Sometimes, termite inspectors are just simply lazy. They will not go into a crawlspace. Maybe they don’t go into an attic. Maybe they don’t peer into the corners in the recesses of a particular room because it’s hard to get to. And they don’t see something that they absolutely should have.

Termite Damage Behind Bubbling Paint

Other signs of termite infestation that termite inspectors should usually see is it’ll look like bubbling paint. Well, that happens because the termites will eat right up to the level of the paint and it will look bubbled. What you do when you see that, an inspector would take a screwdriver or perhaps a finger, push it in, and the paint of course is so thin, it will break, and then you would immediately see termite damaged wood underneath.

Dead Termite Swarmers

Other signs of infestation that we’ve had cases where inspectors have missed this is literally termite swarmers that are usually, at the time of inspection, perhaps dead on a window sill or dead on the floor and the inspector simply does not have the knowledge to figure out, oh my gosh, these are termites.

There’s obviously termite damage if there’s termite swarmers and raise that and bring it to the attention of the homeowner.

So the common theme in these cases is that the inspector missed something that they should not have missed. Of course, that’s what we call negligence.

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Daniel Whitney, Jr. of Whitney, LLP during a termite inspection in Annapolis, MD

If you’ve bought a house in Maryland and you’ve now detected termite damage that you feel should have been discovered in the termite inspection, call us. We represent homeowners in missed termite damage claims across Maryland.

We offer Legal Consultations to Home Owners. Call Whitney, LLP at 410 583 8000, or use our Quick Contact Form, to discuss your potential case.

Bad House Flipping Problems in Baltimore City

Watch the Video Below – House Flippers in Baltimore City take advantage of unsuspecting buyers and often sell flipped homes in dangerous conditions. The law firm of Whitney, LLP has filed lawsuits against multiple house flippers in Maryland for tricking buyers into buying bad houses with hidden damage.

Compensation against flippers can include repair costs by a licensed contractor and compensation emotional distress, as well as punitive damages.

Flips are tempting, but hidden problems include termite damage, termites, mold, unlicensed work, electrical problems, plumbing problems and more. If you bought a flipped house in Maryland and discovered problems, give us a call for a Legal Consultation to discuss your options for compensation for paying for repairs and more.

The lawyers at Whitney, LLP represent home buyers and sue negligent and fraudulent house flippers.

Click Here to Read about Some of Our Settlements Involving Real Estate Claims and Flippers

Click Here to Read Other Blogs on Real Estate Cases and Issues

We offer Legal Consultations. Call us at 410 583 8000, or use our Quick Contact Form, to discuss your potential case. Here is our YouTube Channel for more videos.

Problems After Buying a Flipped House

The Video Transcript is Below, Edited for this Blog:

Hi, this is Dan Whitney with the Whitney Law Firm in Towson, Maryland. Today, we’re going to talk about the issue of dishonest and fraudulent house flippers in Baltimore City. I’m an attorney here in Maryland at the Whitney Law Firm.

There has been a tremendous uptick in the problem of house flippers buying terribly run-down houses in Baltimore City, putting a relatively small amount of work into the property and then flipping it for a huge profit to innocent and unsuspecting buyers. The new buyers do not realize that the house is simply a completely poorly-repaired home that has numerous problems, but with new paint and what looks like a new kitchen and bath bathroom, everything looks great. Who wouldn’t want it?

CNBC did a story as to the dangers in flipped homes in 2018 that rings true in comparison to the current increase in 2021 of flipped houses selling quickly.

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House flippers that hide water leaks cause mold to grow.

Hidden Problems Discovered After Buying a Flipped House

Now, what are those terrible problems that clients have been contacting us about with flipped houses in Baltimore City? Many of the problems or the plumbing simply does not work. The electrical panel or electrical box is not installed. There’s loose wires. The electricity cuts out, and sometimes simply the repairs are just not completed, and a flipper will say, “Here, sign the contract. Let’s go to closing, and within 10 days or two weeks, I will fix problems one, two, and three.”

The problem is, of course, they get their money and run, and the client and the buyer is left to deal with these problems themselves, or try and chase down this bandit house flipper that’s taken the money and run onto the next house to deceive and cheat the next buyer.

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Termite damage hidden behind drywall.

Lawyers to Sue House Flippers in Maryland

A buyer of a flip is often is stuck unless they’re able to hire an attorney to go after the house flipper. That is something that we have been doing with some success. So, some of the issues that we see in the house flips, are of course, the plumbing is done, the electrical’s done, both done wrong, tremendous mold problems sometimes, especially in Baltimore City, there’s issues with water intrusion and waterproofing is either not done or extremely poorly done.

Of course, any of these things, bad plumbing, bad electrical wiring, water intrusion, and mold are going to cause a complete nightmare for the poor family or the poor individual who’s moved in thinking they’ve got this beautiful rehabbed home and really it’s just a piece of junk.

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Daniel W. Whitney, Sr. and Daniel W. Whitney, Jr. of Whitney, LLP

No Permits Pulled on the Flipped House

We often also find that no permits were electrical work, for a building permit, or for plumbing.The work isften it’s done by unlicensed contractors who do not have the necessary training, and are simply not licensed to be doing the type of work they’ve been hired to do.

When a company that flips houses or an individual that flips houses hires contractors, or individuals to do work, and they’re not licensed, and they don’t cause the permits to be pulled, they are being negligent.

If that negligence results in some sort of damage or injury to the person that buys the house, the buyer has some, and perhaps many, many claims against the flipper. Negligence, fraud, potentially a violation of the Consumer Protection Act, and some other causes of action that can allow them not only to get money for the repairs to be completed, but also to actually pay their attorney’s fees, so they don’t need to pay any fees out of pocket.

So, if you should find yourself in a situation involving a bad house flip, or a dishonest house flipper with hidden damage in Baltimore City, please give me, Dan Whitney, a call at the Whitney Law Firm in Towson.

We offer Legal Consultations. Call us at 410 583 8000, or use our Quick Contact Form, to discuss your potential case.

Suing House Flippers for Hidden Home Damage

Whether the real estate market is strong or slowing down, buyers can be faced with dishonest, fraudulent or negligent sellers and real estate agents, and house flippers whose negligence and fraud ruin the enjoyment of a new home. These problems can cause nightmares for homebuyers who move into their home and find unexpected expensive problems and damage. It is common for first-time homebuyers to be victims of hidden problems, because they do not know what to look out for.

There are a variety of ways that a new home buyer can come to find problems, including termite damage, water damage, unlicensed electrical wiring, mold, and unsafe electrical wiring in their new home. To fix it, the common thread is that if the problem is found in a new home after closing, you will likely need to obtain legal representation to help fix the damage. Whitney, LLP’s real estate attorneys help new home buyers fight back and recover compensation to fix the hidden problems.

In addition to physical problems with a new home, problems can also arise involving the deed or title to the home. With problems involving the legal transfer and ownership of the home, title insurance can be helpful and provide solutions.

When home buyers find problems after closing, we have found that some real estate agents are quick to wash their hands of anything to do with newly discovered problems, and tell their former clients that nothing can be done. The truth is that the agent has already received their commission, and to spend any more time on problems with the house does not equate to more money for them, so they take themselves out of the equation. This is after the home buyer has relied on their advice and guidance to purchase the home in the first place. However, all is not lost. Home buyers have many legal rights, and the real estate attorneys at Whitney, LLP represent homeowners who need help.

Whitney, LLP’s home buyer real estate attorneys provide Legal Consultations to home buyers with problems. Call us now for a legal consultation at 410 583 8000, or use our Online Quick Contact Form, and we will be in touch. We represent home owners across Maryland, including in Annapolis, Baltimore, Columbia, Germantown, Silver Spring, Waldorf, Frederick, Ellicott City, Glen Burnie, Gaithersburg, Rockville, Dundalk and Bowie.

Check out our YouTube channel for our videos involving termite damage and real estate problems.

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Termite damage hidden with new drywall by house flippers in Glen Burnie, MD. Whitney, LP sued and recovered a million-dollar jury verdict.

Finding Hidden Termite Damage in a New Home

Whitney, LLP has represented many Maryland homebuyers in lawsuits arising out of termite damaged wood being discovered and home buyers needing to recover compensation so they can pay for a termite damage repair contractor to fix it. Whitney, LLP recovered a $1,068,750 jury verdict in a 2019 case in Anne Arundel County alleging that a house flipper and WDI termite inspection company hid termite damage on a flip in Glen Burnie. Of course, all cases are different and past results are not a guarantee of future results. There are several common ways that the termites, and termite damage, are hidden, and then found, after moving in.

In some cases, the real estate agents involved in the transaction do not do their job. Buyer’s agents need to discuss Wood Destroying Insect (“WDI”) / termite inspections with their clients, and make sure their buyers understand why a termite inspection is important. When negligent real estate agents do not explain to their clients that a termite inspection is important, and the client then moves in and finds termite damage that a termite inspection would have discovered, that real estate agent, and their brokerage, can be held responsible for the termite damage repair, including hiring a termite damage repair contractor, by taking legal action.

In other cases, the real estate agent representing the seller knows that there is termite damage and infestation, but does not disclose it to the buyers. Real estate agents on both sides of a transaction are required to disclose termites and termite damage when they learn about it. They are not allowed to keep termite and termite damage a secret, even if it will hurt the ability of the sale to go through. Despite this duty to disclose, Whitney, LLP has cases involving real estate agents who are completely aware of termites, and hide it from the buyers so the sale will go through. In addition to being negligent by not disclosing the damage, it is also fraud.

Surprisingly, some agents in Maryland do not even know what “WDI” stands for. As stated above, this common term stands for Wood Destroying Insect inspection, and is described on every residential real estate contract in Maryland. In a recent Owings Mills, Maryland termite damage lawsuit filed by Whitney, LLP, our clients’ real estate agent did not discuss with them the importance of getting a WDI / termite inspection. After moving in and finding damage, and asking their agent what did their WDI say, their agent said she did not know what it stood for. Thereafter, a lawsuit was filed against her and her brokerage for negligence.

Other times, the pest control company that performs the pre-sale WDI / termite inspection does not find damage, and incorrectly represents to the home owners that there is no damage. When this happens, and the buyer moves in and finds damage, the negligent pest control inspection company is sued for negligence, and sometimes fraud, depending on if they lied on their inspection report. There are some companies in Maryland that perform WDI / termite inspections that are known for “rubber stamping” the inspection, meaning they will almost always say there is no damage. Real estate agents know who these companies are, and should avoid them. However, they often do not, all at the expense of the buyer who may be stuck with expensive hidden termite damage after moving in.

Sellers, especially house flippers, are also known to hide termite damage from buyers. There is a common misconception that just because as house is sold As-Is, that termite damage does not need to be disclosed. That is incorrect. In Maryland, whether a house is sold using the Maryland Disclosure or Disclaimer form, termite damage and termites are a latent defect, and must be disclosed by the seller. Proving that a seller hid termite damage is often proved by finding new construction materials, such as drywall or electric wiring, installed directly adjacent to termite damaged wood. When a house is flipped, it is much more expensive to actually fix the damage than to just cover it up and hide it. This happens often in Maryland.

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Dead termite swarmers. When a new home owner sees swarmers, that is a red flag for a termite infestation and hidden damage.

A tell-tale sign of hidden termites in a home often occurs in March and April when termite swarmers hatch and begin to fly around an infested home. These swarmers literally come out of the woodwork, and are a horrible surprise to new home owners who bought their house after the previous swarmer season. When hundreds and thousands of termite swarmers fill a house, it is a red flag that there is a long term termite infestation that is accompanied by serious hidden damage.

No matter how termite damage was discovered in a newly purchased home, Whitney, LLP provides legal consultations and can help determine the buyer’s legal rights for compensation to fix the termite damage in their new home.

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House flippers that hide water leaks cause mold to grow.

Finding Water Damage and Mold After Moving Into a New Home

Moving in and finding water damage and leaks, and mold, are a common problem in Maryland, especially in rowhomes in Baltimore City and other areas where the water table is high. Whitney, LLP has represented home buyers who purchased properties that were flipped by house-flippers, moved in, and found water damage and leaking water in the basement. Water damage occurs when a basement is not water proofed properly, and when the land outside the home is not graded properly, allowing rain water to seep in through the ground. Along with water damage, mold is a serious problem that can be expensive to fix and cause health problems to the new residents.

Buying a home from a house flipper is a risky proposition. It is common for house flippers to do cosmetic work, and to hide any serious damage and cover up any problems that are expensive to fix, such as water damage. Sellers often try hide signs of water damage using new drywall, installing make-shift water barriers, and using other temporary fixes that are designed to hide the problem long enough for the seller to get paid and move on. This temporary fixes do not prevent mold from growing and multiply.

Sometimes, a potential buyer will find signs of water damage while doing a walk-through, and ask the seller to fix the damage. In these cases, a seller will sometimes promise to fix the damage by waterproofing the basement. However, they often have unlicensed contractors perform minimal work, or promise to fix the leaking after the sale goes through. It is always better to make sure the water damage problem is fully fixed before moving in. Waiting until after buying a house, and waiting for a seller to make a repair until after they get paid is asking for trouble.

In one instance that Whitney, LLP was contacted about, a house flipper in Baltimore City actually built a wall to conceal water leaking into the basement, and made a makeshift water barrier, instead of actually having a legitimate water proofing job performed by a licensed contractor. The damage was discovered after the buyers moved in and discovered a small room behind the new wall that contained water damage and mold. When it comes to buying a flipped house, anything is possible, and buyers should use extreme caution.

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Dangerous electrical wiring that would not pass inspection by an inspector.

House Flippers Using Unlicensed Contractors and Not Pulling Permits

It is no secret that house flippers often use unlicensed contractors who do not pull permits to perform serious work that should only be performed by licensed contractors. Not only is this potentially dangerous for the buyer, but it is illegal.

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Screenshot From Baltimore City’s Permit Website

Part of the process that house flippers often ignore is pulling permits. Pulling permits simply means submitting a request to the local government to have work that is performed be reviewed and approved by an inspector. For example, in Baltimore City, permits are required to be pulled for basically any significant work performed in a home.

The danger of failing to pull permits for work, especially electrical and plumbing work, is that the home will have work done that is not inspected by the local government inspector to make sure it was done correctly. When electrical work is performed and it is done installed correctly, the risks include fire and death. However, house flippers often do not care and only want to make a quick profit. Having the work done by a licensed contractor, and pulling permits, cost time and money.

When a house flipper sells a house that has not had permits pulled, the home buyer has legal rights that can help them get problems fixed. Whitney, LLP offers legal consultations to home buyers.

Daniel W. Whitney, Jr. and Daniel W. Whitney, Sr.

Whitney, LLP’s Attorneys Help New Home Buyers with Problems

Whitney, LLP represents Maryland home buyers who moved into a new home and found hidden damage and dangerous conditions. We have helped many home owners who were tricked by house flippers, home sellers, and dishonest real estate agents.

Consultations are Free. Call 410 583 8000, or use our Quick Contact form.

Can I Sue My Home Inspector for Defects Left Out of the Report?

When purchasing or selling a home, you want to be aware of any material defects that could affect the price of the home or require serious repairs. Home inspectors are expected to be skilled enough to locate defects in a home that must be disclosed in accordance with the law. However, not every inspector exercises care when investigating the condition of a property. If your home inspector negligently failed to discover a defect on your property, you should consult with an experienced Baltimore termite damage lawyer. At Whitney, LLP, our firm is dedicated to providing you with the unique legal representation that you deserve. Our lawyers are here to explain whether you can sue your home inspector for defects left out of their report.

When is an Inspector Liable for a Defect?

Homebuyers will typically seek the assistance of a certified home inspector when deciding to purchase a property. Many inspectors are employed by an engineering or construction company that instruct the inspector on how to perform a proper inspection. However, some inspectors may opt to cut corners when performing an inspection for various reasons, like keeping costs to a minimum.

A home inspection in Maryland requires an inspector to investigate several areas of a home. The Maryland Property Disclosure and Disclaimer Statement have a checklist of areas of the home that should be inspected before the home is sold or purchased. For example, there are questions regarding the structural integrity of the property, heating and cooling systems, the presence of hazardous materials like lead-based paint, and many other inquiries.

Usually, the seller of the property is required to fill out the disclosure or disclaimer statement. The seller may even provide an inspection to the potential buyer. However, it is important to consider hiring your own inspection company to ensure the seller is not attempting to conceal a defect.

If the inspector you hired produces a report that suggests that the property only has minor issues, it is reasonable to rely on their assertion, especially if you thoroughly researched the inspection company. However, there are times when an inspection may not reveal a material defect. A material defect is an issue with a property that may be dangerous to an occupant’s health or safety, or that may require extensive and costly repairs.

An example of a material defect that should not be left out of a report is the existence of a termite infestation. Termite damage could cost you an exorbitant amount of money and may even require you to seek a temporary place to live while you have the termites exterminated.

If an inspector neglects to find a material defect that was reasonably discoverable, they may be liable to the homeowner for certain issues caused by that omission. To learn more about home inspector liability, you should speak with an experienced Maryland termite litigation attorney.

When to File a Claim for a Negligent Inspection

If your inspector negligently omitted a material defect from their report, you may have a valid cause of action for negligence. Before filing a negligence claim, you should gather evidence that proves the inspector failed to detect a certain defect.

One way to document the defect would be to seek an opinion from another trustworthy inspection company. A second or third opinion will help you determine whether your inspector should have discovered a defect before you purchased the property. For example, if the wood beams in your home were hollowed due to termites, there are certain tests that could have exposed the damage.

Before you begin to repair any damage in your home due to the defect, you should document the defect thoroughly. Photographs of the defect and the damage to your property would be prime evidence to keep in anticipation of a trial. If you have physical evidence of the defect, you should also preserve it.

You should also beware of signing any contracts with an inspection company that limits their liability. These contracts may contain restrictive terms that state how much a plaintiff could receive in the event of an omitted property defect. They may also require that the plaintiff must seek arbitration instead of filing a lawsuit. If you signed a contract with an inspection company that restricts your right to compensation, you should bring it to an attorney to be examined. Depending on the circumstances and the terms of the contract, there may be a way to proceed with your claim.

Our Experienced Maryland House Inspection Attorneys are Ready to Represent You

If you or a family member was suffered financial losses and other harm due to an erroneous inspection report, you should contact an experienced Maryland house inspection attorney. The diligent attorneys at Whitney, LLP are prepared to help you pursue a claim against a negligent inspection company. To schedule a consultation, call us at (410) 580-8000, or contact us online.

Table of Contents

Problems Discovered After Signing

False or Incomplete Information Supplied by Seller

Disclosure Statement

False Disclosure Statement

False Disclaimer Statement

Contract Terms and Conditions

Return of Deposit

“AS-IS” Addendum

Bad Advice and Pressure from Real Estate Agent

Whitney, LLP – Real Estate Closing Attorney Advice

From Dream House to Money Pit In a Week

Discovered Flipper Did Not Pull Permits

Water Intrusion in the Basement

New Drywall Over Pre-Existing Damage

House Flipper Hidden Defect – Structural Damage

Expensive Repairs

Bringing Claims Against a House Flipper

House Flipper Hidden Defect $90,000 Settlement

Real Estate Attorney to Sue House Flippers – Whitney, LLP

First Time Homebuyers Sue Real Estate Agent and Pest Control Company, Recover $112,000

The WDI Inspection Form

Termite Treatment

The Scope of Termite Damage Must be Evaluated

A WDI Inspection Was Performed But Agent Did Not Disclose Results

Five Years Later, Termite Damage Was Discovered

The Pre-Closing Treatment Was Not Performed as Described

The Real Estate Agent and Pest Control Company Settled

Lawyers for Maryland Home Buyers

Termite Inspector Missed Termites Before I Bought My House

Negligent Termite Inspection Before Closing

Expensive Repairs for Hidden Termite Damage

Signs of Termite Damage During an Inspection

Problems After Buying a Flipped House

Hidden Problems Discovered After Buying a Flipped House

Lawyers to Sue House Flippers in Maryland

No Permits Pulled on the Flipped House

Finding Hidden Termite Damage in a New Home

Finding Water Damage and Mold After Moving Into a New Home

House Flippers Using Unlicensed Contractors and Not Pulling Permits

Whitney, LLP’s Attorneys Help New Home Buyers with Problems

When is an Inspector Liable for a Defect?

When to File a Claim for a Negligent Inspection

Our Experienced Maryland House Inspection Attorneys are Ready to Represent You

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