real estate

Does 'buyer beware' apply to an illegal sewer line?

Steve McLindenDear Real Estate Adviser,
Two months after I bought a house, I discovered that the seller had run an illegal sewer line into a neighbor's property in order to make it appear as if the house had a sewer-line connection. There are no permits on file for it and he didn't disclose it in the sale. Moreover, the seller didn't have an easement to cross through a neighboring property to run the sewer line into that other property.

Does "caveat emptor" apply? There wasn't any way for me to detect that sewer line during the inspection.
-- Denise K.

Sewer line | hamKC/Getty Images

© GSPhotography/Shutterstock.com

Dear Denise,
What a mess. Certainly, caveat emptor, or "let the buyer beware," applies here, because it's far easier to remedy a problem like this before a deal is closed than after.

But the seller's lack of disclosure was obviously intentional and he appears to be civilly liable to you and criminally liable for theft of services.

You've got some calls to make. First, you should report this theft to the police, in part so that any potential responsibility for this illegal hookup will be taken off of you and, in part, so you can begin to build a civil case that disclosure fraud has occurred.

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You may be without sewer service

Who knows what other services this guy was stealing from neighbors? You also should call the city to report the issue since this involves stolen city services and a lost sewer tax. One of the two entities will inform the affected neighbors.

And yes, all of this will leave you without sewer service. Sadly, you will be stuck paying the $2,000 to $7,000, including the plumber hookup fee, to legally connect to a city sewer line. You may be able to eventually recover some or all of this in a civil action.

Thirdly, contact the seller's real estate agency and report this deception and the suspected theft/trespass. You can introduce the possibility that the listing agent knew about this condition -- if you have reason to believe that is valid.

Fourthly, pull together all contracts, closing papers and disclosures, and consult with a highly rated local real estate attorney. Disclosure fraud can be costly to litigate (and duplicitous sellers know this), but a good attorney can at least tell you where you stand and if it is worth it to sue.

It seems you have strong grounds to move forward. But at what cost?

Report the hookup to authorities

And don't forget to contact your homeowners insurance company to see what it might offer in the way of coverage or advice. If you purchased a home warranty, you can check to see if it includes major plumbing issues, though this is a bit of a long shot since the claim may be denied because of the illegal hookup.

What will happen to the seller on the criminal level, assuming he can be located, depends on local and state laws. In Florida, for example, this fraudster could face the charge of "trespass and larceny with relation to utility fixtures; theft of utility services," which includes theft of water and sewer services. But what he did is illegal in all states.

You didn't mention the use of a buy-side home inspector -- and that's a step you shouldn't skip -- although even an inspector may not have detected this illegal rerouting. Standard inspections usually don't include sewer lines, but they do include inspections of septic systems.

I'm sorry to say there's no heartening win-win scenario to offer in your case. Good luck!

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