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.

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.

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.

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.

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.

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.