On February 20, 2010 husband and I toured almost a dozen homes for sale (after looking at over 30 other homes over 6 months); one of the last ones was in (Frogtown) Saint Paul. It was listed for $134,900 (near the top of our price-range) and stated it was a recently renovated/remodeled home with many upgrades. On the initial walk through the house was staged and clean, with no odors and no obvious visual indicators of any problematic issues. We placed an offer that day on the house for less than asking price. Our realtor, Barb Churchill lic#20363884, provided us with the TISH report on 2/20/10 and I inquired about the statement regarding it being a registered vacant building with indications of dampness/staining in the basement. I was assured by Barb that the sellers had gotten a certificate of code compliance and any issues had been remedied prior to the house being put up for sale. Our first offer was countered and we were advised to give full asking price by our realtor because the house had been remodeled, was move-in-ready and had upgrades. We submitted our second offer for the full asking price based on those reasons and the offer was accepted. I arranged for a home inspector to come out and evaluate the property on 2/24/10. The home inspector, Scott Scheuer, was not allowed to do an invasive inspection and he found very little problems with the house. Barb submitted a list to the Seller, Jonathan Bruntjen, owner of Twin Cities Real Estate and licensed real estate broker #40024771, of the repair requests that included repairing a broken window, a cracked electrical elbow on the exterior of the house, the front door wouldn’t lock easily so we wanted that rectified and there was ice coming out of the siding above the living room window on the west side of the house which indicated a leak in the roof so we asked for the Seller to investigate the source of the water penetration and remedy it.
On 3/5/10 I received an email from Barb stating that all the repairs I’d requested had been completed. We were not given the opportunity to have our inspector re-inspect the Seller’s repairs (didn’t even know it was an option actually, never having bought a house before and my realtor never mentioned it). 3/10/10 is the listed date of the FHA appraisal of the property.
On 3/14/10 husband and I drove by the house to check out the yard now that the snow had melted. Husband noticed immediately that the ice dams were gone and there was evidence that the roof was leaking on the east and west sides of the house. There were clear trails through the dirt up underneath the eaves of the house where water had run out through the weep holes in the siding leaving clean streaks that were extremely visible. I notified Barb via email that we had concerns regarding the roof leaking and she cautioned us against making assumptions but agreed to for’d our concerns on to the Seller. Husband went and took pictures of the water streaks so he could show them what he was talking about. A meeting was arranged at the property on March 19, 2010 to investigate the water streaks, but when husband and Barb showed up the dirt (and consequently the streaks through the dirt) had been removed via a pressure washer by the Seller’s contractors. When they were questioned about why they washed the dirt off they responded by saying they wanted to clean the house to be nice. During the course of the meeting husband kept trying to express his professional opinion that the roof was leaking and was continually told that there was no way the roof was leaking and he was blowing things out of proportion. Husband pointed out that he was a roofer and knew what the streaks of water indicated, in response one of the men informed husband & Barb that they had manually removed ice dams from the roof on their own and then pounded the flashing back down so there was no water up there to leak into the house. This information caused husband to ask why they removed the ice dams as he (the buyer) never requested it and he loudly stated that their improper removal of the ice dams would’ve destroyed the roof, and then he pulled out his roofing license and passed it around the room as proof of his knowledge. Husband insisted that they perform a leak test by running a garden hose over the roof to see where leaking occurred. The leak test was scheduled for the following Sunday, March 21, 2010. During the leak test it was proven that the roof leaked in several areas. The areas that leaked the most visibly were the chimney section, the 2 northeast roof vents and the bathroom dormer, in those areas water poured in as if there was no roof at all. There were patches of other roof areas that indicated leaking as well and a cad diagram was created by husband to illustrate what repairs needed to be done.
The Seller agreed to make repairs and an addendum was signed by both parties.
We were not given the option of a final walk-through. Ie was told over the phone by Barb that she didn’t have time to show it & I was reassured that they had just seen the house a week prior and it was the same house. The Seller was not present at the closing. Husband and I were not provided with keys at the closing. Instead we were given the code for the realtor lock box and told to let themselves in. Barb did negotiate during closing to get us a $300 check for the purpose of purchasing a garage door opener as it was indicated on the Purchase Agreement that the house came with one and we informed her that there had not been one installed as of the last time they saw the garage. Husband and I were told all repairs had been completed at the closing.
There was a receipt given to us for the roof repairs that the Seller provided at closing, it did not indicate what work was done, did not accurately represent the cost of the actual new materials found on the roof and did not include the earlier repairs from February.
As we drove up to the house after closing we noticed all the windows, including those on the 2nd floor, were wide open. We used the code to open the realtor box and get the key to the front door. The first thing we noticed when we attempted to open the door was that the repair to the front door was never completed although we had been told it had been fixed on March 5th. After a brief struggle with the lock we stepped through the front door to see the entire living room covered in sheet rock dust and there was a pile of shredded paper and general dirt/dust sitting by the entrance to the dining room. The next thing that hit us was the smell of death and decay that assaulted our nostrils within a step inside the house. The smell progressively got stronger as we got closer to the kitchen. I couldn’t stand the smell and immediately vacated the house and called Barb to inquire as to what had happened. Husband investigated and found that sheet rock dust was coating every room on the main floor and even over most of the floors on the 2nd level as well. Barb declined to come out to the property despite my request and stated that the smell was probably caused by sewage gas trapped in the water pipes; she had no response for why the windows were all opened and encouraged me to not blow things out of proportion. Husband ran water through all the pipes which did nothing to reduce the odor present throughout the entire first floor. I called Barb again, letting her know it wasn’t the pipes and Barb finally agreed to come out the following afternoon to look over the house. I also informed Barb at that time that there was debris left all over the yard and in the cubbyholes along the roof line of the 2nd floor that was supposed to be removed per the Purchase Agreement, Barb wouldn’t address that issue and changed the subject. I spent the night of 3/31 back at our apartment. Husband spent the night changing the locks on the doors at the house with 2 of his friends. Around 4am a police car pulled up on by the driveway of our property and the officer questioned husband on why he was rekeying the lock on the back door. Husband explained to the officer that he had just purchased the house and requested the officer come take a look at the house. The officer declined, opting to stay in his vehicle, but noted in his report for that night that he could smell a foul odor emanating from the property all the way to the street. On 4/1/10 Barb did come out to view the property around 3 in the afternoon. She initially tried to tell husband that he was exaggerating about the condition of the house and offered to send a cleaning crew to clean it the following week for $50. As she walked through the house Barb continued to insist the smell wasn’t very bad and was probably sewer gas or the fruit from the trees outside along the street. As she was leaning against the stove she suddenly got a disgusted look on her face and immediately vacated the property. Barb asked husband if that was the smell he was referring to and he replied that it was. Although the smell was enough to drive Barb from the house she continued to claim it must be sewer gas and would probably dissipate over time and left without providing any answers about why the previously spotless and odorless house was no longer in that condition, why there was debris from the seller still on the property, why the repairs to the roof were not done correctly and who had been in the house on the day of closing. Around 8pm the night of 4/1/10 Husband, searching for the source of the odor, decided to pull the stove out from against the wall. The stove was clamped into a locking cleat on the floor and had less than 1 inch of clearance on all sides including the bottom. When he began to pull the stove out the odor intensified. Husband had discovered a dead squirrel, flattened and belly-up underneath the burner track of the stove, with its head on part of the locking cleat.
When he removed the squirrel from the house the odor began to dissipate. There was no evidence that the squirrel died underneath the stove and due to the lack of clearance there was no way the animal could have physically gotten underneath the stove on his own, especially on his back. We called the police and filed a report. The police that came out agreed that there was no way the animal could have gotten into that area but stated that since the animal was placed there prior to us owning the home, they had no legal recourse. I had attempted to call Barb who wouldn’t answer and so I sent an email to our realtor informing her that husband had found a dead squirrel under the stove. Barb responded with an email that said “Glad you found the source of the smell. Now you can move on.”
Husband and I spent the first weekend of April 2010 cleaning up the sheet rock dust and airing out the house. Finally on 4/4/10 the house was clean enough to begin moving furniture in and we finally spent our first night in the property. We waited to hear back from the Seller about why the roof was still leaking and there was still debris from the Seller all over the yard and attic spaces. After several days husband called Counselor Realty and asked to speak to Barb’s supervisor about the leaking roof. He was told that Barb had no supervisor but that he would look into the matter and call us back, he never did. On 4/5/10 a request was sent to the Seller requesting the roof leaks be repaired. On 4/6/10 Husband climbed up on the roof and spread roofing cement over several of the obvious areas of the roof where water was penetrating in an attempt to reduce the amount of water damage from the leaks. That was also the day I finally received a copy of the FHA appraisal for the property. On 4/8/10 Husband noticed that the heating vents in the basement, coming off of the furnace, were not properly sealed and carbon monoxide was leaking into the basement. We used silver heating duct tape to seal the seams to reduce the leaking.
4/9/10 I received an email from Barb stating the Seller was willing to work with us regarding the roof.
Husband and I began the search for an impartial roofer that we didn’t know. On 4/10/10, while taking a shower, Husband noticed that the glass block in the upstairs bathroom shower was not sealed and water was running down inside the tile wall. Husband used silicone caulking to seal up the space between the glass block and the wall to eliminate the water penetration. A few days later on 4/13/10 I received another email stating that we were not allowed to pick the roofer; instead Barb was to pick someone to investigate the Seller’s repairs to the roof. We waited for someone to come out and take a look.
On 4/17/10 I noticed that the tile in the 2nd floor bathroom was beginning to crack along the grout lines and a water test indicated the grout was never sealed. The next morning I woke up in the 2nd floor bedroom and was experiencing respiratory issues including excessive coughing. That night, 4/18/10, I decided to sleep on the porch due to a respiratory reaction that continued to occur every time I went upstairs. On 4/24/10 Husband noticed that cracks were beginning to appear in the plaster walls and ceilings of the 2nd floor bedroom and main floor. The next morning on 4/25/10 Husband once again went up on the roof and applied roof cement to the leaking areas of the roof. On 4/27/10 I received an email from Barb informing me that Twin Cities Real Estate had sent a roofer out to investigate on 4/23/10 and she was waiting for their roofer’s estimate. On 5/10/10 I received an email from Barb stating the Seller’s roofer confirmed that the repairs to the roof were done improperly. The Seller offered us $1000, or to pay for a roofing company to come out and re-repair the repairs if it didn’t cost more than $1100, but stated that we would have to sign a document relieving Twin Cities Real Estate of all future liability. We declined this offer for 3 reasons. The first reason was that at that point in time several roofers (including the Seller’s) had told them that due to the nature of the repairs the only way to eliminate the roof from continued leaking would be to replace it and that would cost more than $1100. Secondly, additional damages had now been sustained from the amount of water damage that occurred from the leaking roof which totaled more than $1000. Third, in finally being able to do invasive investigation on the property we had found numerous code violations and hazardous issues that the Seller was supposed to have taken care of prior to selling the property and to repair these issues was well over $1000 in cost. At this point we decided we needed legal representation and a lawyer to represent us. On 5/12/10 we informed Barb that all future contact with the Seller would now be through our lawyer. On 5/14/10 Lawyer contacted Twin Cities Real Estate and requested a meeting to address the issues with the property. On 5/19/10 we received an eviction notice from the city of St. Paul informing them that there was no code compliancy for that property and that we needed to vacate immediately and correct the issues. Husband and I were quite surprised to be receiving this notice as we had been assured that the house was code compliant and had passed city and FHA inspection. We immediately alerted our lawyer and began to make arrangements to stay somewhere else until the situation was resolved.
On 5/25/10 I received the 2009 Code Compliance report that the city of St. Paul gave to Twin Cities Real Estate regarding the property from Lawyer. This Code Compliance report listed all the deficiencies and code violations that needed to be corrected prior to selling the house. We looked over that report and examined the areas of the house outlined and found that over half of the required repairs had never been completed. Several of the repairs listed on the Code Compliance report were issues that Husband had already noticed and tried to address with the Seller via Barb but had been told that he was “making assumptions” and that the issues had passed city inspection. We especially noted that the Compliance report stated that the Seller was to “dry out basement and eliminate source of moisture” & “remove mold, mildew and moldy or water damaged materials” which was never completed. The next day Husband, Lawyer and I met with the Sellers’ representatives, George Nelson and Randy McClanahan of Twin Cities Real Estate Partners, LLC at the property to discuss our concerns regarding the improper roof repairs and the eviction notice from the city. Initially Mr. Nelson was cordial, however once the eviction notice was presented to him by Lawyer, Mr. Nelson became aggressive. He immediately stated that the city must’ve misplaced some paperwork and it was clearly an error, then not a minute later he accused Husband of calling the city on himself. Husband truthfully denied the accusation and asked Mr. Nelson who told him that. Mr. Nelson said someone from our side told him that and Husband responded that the only person on his side was Lawyer. Lawyer denied the accusation and Mr. Nelson refused to divulge the name of the person who had told him the Husband had “called the city on himself” despite Husband’s repeated requests. Lawyer stepped in to smooth things over and calm Mr. Nelson and Husband who were both slightly riled up about the eviction notice, after a short conversation the tour of the property began. Husband began to point out some concerns that were occurring due to water damage from the roof leaks. Mr. Nelson didn’t convey much interest in what Husband had to say and kept looking to Randy for back-up on justification of why the issues were not important. Mr. Nelson also refused to acknowledge any issues relating to the 2009 Compliance Report, continually stating that the city of St. Paul had passed it so it must be ok. Mr. Nelson denied that there was any mold on the basement walls, despite it being clearly visible and tried to claim it was merely dirt. The meeting ended with no resolution to the issue of the leaking roof, no indication that the debris would be removed and a refusal on the part of the Seller to acknowledge any of the other hazardous concerns we had. Two days later on 5/28/10 a tile from the 2nd floor bathroom popped up out of the floor exposing an improper subfloor and live post and knob wire was found wrapped around pex plumbing where water leaking from the deficient roof would drip on it during rainstorms. After discovering these issues Husband and I determined to no longer utilize the 2nd floor bathroom for safety reasons. On 6/1/10 we received a letter from the city of St. Paul stating the open permits had been closed out. We were confused about that as no city inspectors had come out to the property to re-inspect. On 6/2/10 Lawyer sent the Sellers a list of known deficiencies of the property. In response to the list the Seller arranged another meeting for 6/3/10 but insisted that Husband not be allowed at the meeting or on the phone as George Nelson had a heart condition and was afraid Husband would “attack” him. Although there was no basis for Mr. Nelson’s accusation we agreed to the Seller’s condition in an effort to resolve the situation. On 6/3/10 Lawyer & I met with George Nelson, Randy McClanahan and one of the contractors who worked on the house at the property. During this meeting Mr. Nelson and his contractor did not listen to the concerns I was attempting to address and instead tried to lay claim to some of the minor repairs we had performed and continually disagreed with me on every issue I tried to discuss. Early in the meeting, when our room mate asked the contractor if he was licensed Mr. Nelson told him he needed to leave the house or the meeting would be cancelled. Near the end of the meeting my father showed up and came downstairs and Mr. Nelson immediately requested that he identify himself and that he leave or once again the meeting would be over. At no time was Mr. Nelson willing to address the issue of the roof or the debris that was left behind. The second meeting also rendered no solutions to the breach of the purchase agreement or any of the hazardous conditions caused by the contractors. The next day Lawyer scheduled another independent roof inspection. JM of the Gopher Company came out and inspected the roof. He also found the roof to be deficiently repaired and recommended a complete roof replacement to eliminate leaking.
On 6/7/10 the city of St. Paul approved a permit to open the walls of the 2nd floor master bedroom to investigate the extent of the water damage. The ceiling was opened up and evidence was found supporting moderate leaking along several areas of the roof. The opening of the ceiling and walls also showed that the new light socket/fixture, outlets, & conduit box the Seller installed were tied into existing post and knob wiring with no protective grummet installed. Husband began to remove moldy cellulose and animal hair insulation from the ceiling and walls of the 2nd floor bedroom to reduce the amount of material that could grow mold. 6/8/10 I went to see a doctor to determine the cause behind the respiratory issues I had been experiencing since April. After examinations and blood tests it was determined that I was suffering from mold poisoning/exposure.
After going to the doctor, I set up an inspection by Moldex to be completed on 6/10/10. Steve Nordrum from Moldex came out and inspected the house. He took air samplings and did several bioreveal tests to determine the levels and strains of mold present in the house as opposed to outside. While he was testing the basement, Steve commented to Husband that the basement walls looked like they had been bleached, but the mold had never actually been abated. Steve said that bleaching a mold infested wall would only temporarily push the mold back for awhile giving the appearance that the issue had been resolved, that it was a quick fix, but not a solution, to mold growth. 6/10/10 was also the day that Gopher Company submitted their estimate for the roof at $9130 for cost of replacement.
Although the basement was dry, Husband placed dehumidifiers in two of the corners to try to reduce the pace of the mold growth; he also sprayed a mold inhibitor on the walls in an attempt to reduce the amount of spores present in the walls on 6/11/10.
On 6/13/10 Husband once again put roofing cement over several of the areas on the roof that leaked extensively. 7/1/10 Husband was attempting to unclog the bi-metal corrosion that had built up in kitchen sink faucet. He cut the metal panel covering the under sink area off (there was no access to the underside of the sink) so that he could access the plumbing. He discovered improper plumbing and hazardous electrical issues along with visible mold growth upon examining the area. 7/3/10 Husband placed roof cement on the heaviest leaking areas of the roof. 7/4/10 Husband was injured at work and placed on workman’s comp for a pinched nerve in his neck. 7/5/10 paint began to peel off of the living room wall on the west side around the window frame. As the paint began to peel off it revealed previous cracks in the plaster wall that had been improperly repaired using joint compound. The cracks lined up with the water/ice penetration that we had requested be investigated and repaired on their initial repair request to the seller. On 7/20/10 we sent the Seller (via his representative George Nelson) a demand letter requesting repairs via Lawyer.
July 14, 2010
George Nelson, Twin Cities Real Estate Partners, LLC
130 Lake Street West
Re: Defects at (xxxxxxxxxxx) St. Paul, MN
Our File No. 1013-1
Dear Mr. Nelson:
Since the last time we spoke, we have been conducting some preliminary investigations into the problems at the property. This letter outlines most of my clients’ complaints and their legal basis for seeking redress. My clients are prepared to file a lawsuit if an agreeable settlement of this matter cannot be reached in the near future.
As you are aware, this matter involves the sale of the residential property (hereinafter, “the property,” “house,” or “home”) located at xxxxxx to xxxxxxxx (hereinafter, “clients” ). Originally, the property was vacant and required extensive construction to bring it up to building code standards and the expectations of prospective buyers. A general building permit was issued by the City of St. Paul in September of 2009 in the estimated value of $43,000. Mechanical, electrical, plumbing and a host of other permits were also obtained from the City. A Truth-In-Sale of Housing inspection was performed on December 23, 2009 at the behest of Twin Cities Real Estate Partners, LLC.
The clients entered into a Purchase Agreement with Twin Cities Real Estate Partners on February 20, 2010 for the sale of the home with closing scheduled for March 31, 2010. The clients hired a private housing inspector, Scott Scheuer, who completed his inspection report on February 24, 2010. Part of the repair requests resulting from the home inspection included a request to investigate possible water leakage on the west side of the house above the living room window. The clients were assured that all repairs had been taken care of and there was no water leaking from the roof. A few weeks later, when the roof was less obscured by snow cover, the clients discovered significant evidence of water leaking from the siding on the west, south and east sides of the house. My clients learned shortly thereafter that ice dams, which had formed along these sides of the house, had been removed with solar salt and hammers. In response, the clients requested that a “water test” be performed to indicate whether the roof was leaking and where. This test was performed on March 21, 2010, after which significant leaks were discovered. Both parties signed an Amendment to Purchase Agreement on March 24, 2010, detailing specific roof repairs that the seller was willing to complete, guaranteeing at the very least that the roof would be sufficiently repaired and leak-free by the time of closing. Twin Cities Real Estate Partners hired RandMark Contracting to complete the roof repairs and provided an invoice to the parties dated March 30, 2010. It was the clients’ justified belief that the roof repairs were done competently and would prevent further leaks. Final closing took place as scheduled on March 31, 2010.
Upon entering their new home, the clients were met with some unpleasant surprises. The majority of the interior was covered with a dusty film, later understood to be sheet rock dust. A pile of rubble from the old garage was heaped in the yard along with a large realtor sign, despite the clear provision in the purchase agreement requiring sellers to remove all debris and personal property prior to closing. The house was filled with a foul odor, never before detected in their prior walk-through. This odor was discovered to be the smell of a rotting animal carcass dropped by someone underneath the kitchen stove. They filed a police report and were told that the carcass was road-kill, and that there was no way the animal could have gotten behind the stove on its own. The removal of the animal carcass eliminated the foul odor. The clients, at this point, tried to move on and clean the house up, feeling grateful that the problems thus far were fixable, though unsightly, bizarre, and inconvenient.
Unfortunately, however, the problems did not end here. It was soon discovered by the clients that despite the written agreement to repair the roof, the repairs that were made were insufficient and poorly completed. The roof was still leaking. Twin Cities Real Estate Partners and the clients agreed to have a third-party licensed roofer inspect the repair work done by RandMark. The inspector confirmed that there were indeed still problems with the roof. In a conversation between this licensed roofer and the clients, they were informed that in his professional opinion, the entire roof needed to be replaced. At this time, Twin Cities Real Estate Partners agreed to pay for the correction of four faulty issues identified by this roofer. The clients were forced to decline this offer, however, because Twin Cities Real Estate Partners demanded that acceptance be accompanied by a waiver of all future claims against the seller.
The roof, however, is still leaking and despite the clients temporary patchwork to mitigate damages, there was already significant water damage in the home. The clients have hired two impartial licensed roofers to re-inspect the roof and both have confirmed that only a replacement of the entire roof will prevent further leakage and water damage. One of these roofers has confirmed that faulty workmanship in repairing the roof is a major cause in the continued problem. Both of these roofers are prepared to give testimony of their conclusions in the form of sworn affidavits, depositions, or in-court testimony.
In relation to the problems with the roof, the clients have discovered a wealth of other defects in their home. Since the time of their final walk-through prior to closing, a crease has formed on the living-room ceiling, cracks have emerged on the second-floor ceiling in the bedroom, and cracks have formed in the wall surrounding the main entrance into the home and numerous other locations throughout the first floor. It is our contention that these defects directly stem from water leakage from the roof. Furthermore, since closing, the clients discovered visible mold covering the basement walls. They have since hired a mold inspector to take readings throughout the house, and though this process is still underway, he has already detected high levels of airborne mold throughout the house. As I am sure you are aware, mold only grows in environments where water is present. It is the professional opinion of this inspector that the interior walls of the basement were bleached, prior to the showing of the home, in order to kill the then-present mold on the surface of the walls. This effort, however, did nothing to remediate future mold growth and effectively worked only to conceal evidence of water intrusion and mold growth on the walls. The mold problem in the basement continues despite assurances made to the clients’ realtor that the water intrusion problems in the basement had been corrected. The mold inspector has estimated that the total cost of correcting the ongoing water intrusion and mold issues in the basement would be upwards of $5,000.00.
The mold that has been detected throughout the house has caused serious problems with the clients’ ability to comfortably inhabit their home. One client regularly wears a respirator when present in the house and spends her nights sleeping on the porch. Her doctor has no other explanation for her symptoms than an acute reaction to mold infestation.
Additionally, the clients have detected corrosive residue traveling through the plumbing system, causing facets throughout the home to frequently clog. Lastly, faulty wiring and/or a faulty circuit breaker in the basement is causing electrical shorts in the house despite a contractual warranty that such systems would be in working order upon closing.
Based on the aforementioned facts, it is our position that Twins Cities Real Estate Partners is liable at this time under the following causes of action: Breach of the Purchase Agreement, Breach of the Amendment to Purchase Agreement, and Intentional Misrepresentation. Furthermore, it is our contention that Seller is liable for damage caused to the property between the time of executing the Purchase Agreement and Closing, pursuant to Lines 150-151 of the Purchase Agreement. Finally, several repairs and corrections are warranted under Minnesota Statute §327A.
Breach of the Purchase Agreement.
Twin Cities Real Estate Partners breached numerous portions of the Purchase Agreement. Specifically, sellers breached Line 111 by failing to remove all debris and personal property from the premises upon closing, as evidenced by the rubble found in the back yard, a realtor sign, and sheet rock dust throughout the home. Additionally, Seller breached the express warranty in Line 220-222 of the Purchase Agreement by failing to ensure that the plumbing and wiring systems used and located on the property were in working order on the date of closing. This is evidenced by the corrosive residue within the plumbing yielding nonfunctional facets and the electrical shorts experienced on account of faulty wiring and/or faulty circuit breaker in the basement.
Finally, under Lines 233-237 of the Purchase Agreement, Twin Cities Real Estate Partners affirmed that the house had not had roof, wall, or ceiling damage caused by water or ice build up. When evidence on the outside of the house pointed to the possibility of water and ice damage, the clients’ requested a “leak test.” When this test was performed, it was discovered that such damages did in fact exist. The Seller attempted to correct this with a minimum amount of repair-work, despite what was clearly needed to comply with the affirmations made in the Purchase Agreement. The repairs done did not remedy the roof leakage, but rather further exacerbated the problem. Thus, Lines 233-237 of the Purchase Agreement are misstatements or misrepresentations that the Seller has chosen not to correct in a meaningful manner. The clients purchased the home on the belief that the statements in Lines 233-237 of the Purchase Agreement were truthful or would be made truthful through the Seller’s actions. As of yet, the roof continues to leak and cause damage to the home. Thus, Seller has breached the Purchase Agreement through misrepresenting a material fact upon which the agreement was made.
Breach of Amendment to Purchase Agreement.
Seller agreed to repair the leaks in the roof that were discovered during the “leak test,” and not only have these leaks not been adequately repaired, but the poor workmanship in making these repairs has resulted in extensive damage to the roof and the interior of the home as described above. Thus, Seller has breached the Amendment to Purchase Agreement and is liable for all damages resulting from this breach.
Seller represented in Line 237 that they had not had a wet basement. When the clients arrived at the home after closing there was evidence of mold on the basement walls. Further evidence shows that such mold was likely unnoticed before due to bleaching of the walls. According to the mold inspector hired by the client, the walls were likely bleached, which does not correct the mold problem but only temporarily conceals it. It is our belief that the bleaching of the basement walls was an act done specifically to conceal water intrusion in the basement evidenced by the mold which would have been clear after any brief inspection of the home.
“A person is liable for fraud if he makes a false representation of a past or existing material fact susceptible of knowledge, knowing it to be false, or as of his own knowledge without knowing whether it is true or false, with intention to induce the person to whom it is made to act in reliance upon it, or under such circumstances that such person is justified in acting in reliance upon it, and such person is thereby deceived and induced to act in reliance upon it, to his pecuniary damage.”
Hafner v Ritzinger, 97 N.W.2d 839, 842 (Minn. 1959) see also Benson v. Rostad, 384 N.W.2d 190 (Minn. Ct. App. 1986).
In the instant matter, Seller made a representation that the basement had not been wet. This representation is material insofar as the clients would have demanded a lower purchase price of the home or declined to purchase, had they known that the basement had extensive water intrusion problems making it susceptible to mold growth. This fact was capable of being known to the Seller after even a minimal inspection of the basement and observance of the walls covered in mold. Seller knew this statement was false, as evidenced by the attempts made to conceal the false nature of the representation. It is more likely than not that Seller made this false representation to induce action on the part of the clients, namely to induce purchase of the home for a price not contemplating the existing damage. The clients were justified in relying on this representation, and especially because efforts were made to prevent them from detecting the mold problem resulting from water in the basement. Furthermore, the clients purchased the home in reliance on the fact that the basement would not need extensive repairs and have suffered a pecuniary loss on account of such justifiable reliance.
Liability Under Lines 150-151.
Under Line 150-151 of the Purchase Agreement, Seller assumed liability for any loss or damage to the property between the date of execution of the Purchase Agreement and Closing, for any reason. During this time, Seller arranged for repairs of the roof which, on account of poor workmanship, have resulted in extensive damages both to the roof and the interior of the home. According to at least two impartial, licensed roofers, the entire roof must be replaced in order to put an end to the leakage and water damage in the home. This continued leakage problem has its roots in the faulty repair-work completed after the signing of the Purchase Agreement and before the date of closing. As a result, the Seller is liable for the extensive damage caused to the home on account of these negligent repairs.
Necessary Repairs in Accordance with Minnesota Statute § 327A.
In addition to the abovementioned defects and claims, the following comprises additional defects or damages to the home in need of repair under Minnesota Statute § 327A. We have reason to believe that the following items do not meet the minimum requirements of state and local building codes. Please note that you were given notice of these defects on June 2, 2010 and are again reminded of their need for repair.
- A section of the gutter system is missing;
- The flooring in the second-floor bathroom was improperly installed resulting in sections of tile popping up;
- Parging on house foundation has not been repaired or replaced;
- Grout in the upstairs bathroom was ineffectively sealed, causing water to penetrate the grout in the shower area;
- A metal chimney liner has not been installed;
- There is a hole in the basement ceiling giving view of the first-floor bathroom that needs to be filled;
- Romex wiring in the basement is incorrect; and
- Cable and conduits in the basement have not been properly strapped.
Please know that the clients wish to be reasonable in this process and are open to an expeditious out-of-court resolution of these matters. However, your failure to respond to this letter or make reasonable offers for resolution will result in appropriate legal action. I am available for discussion on this matter at any time. Please feel free to contact me by phone at xxxx or via e-mail at xxxx. I look forward to reaching a resolution to this matter in a fair and expeditious manner.
The Seller refused to come to an agreement regarding the demand letter arguing we did not have enough “professional” evidence. On 8/8/10 I awoke experiencing paralysis in my extremities and was having trouble breathing in the house. I vacated the property that day due to my reaction and went to stay with my parents, sleeping on a couch on their 3 season porch. 8/9/10 St. Paul approved a permit expansion to allow repair work on the 2nd floor of the property. We also received the report from Moldex on 8/9/10 which indicated that the levels in our house were extremely elevated, every test FAILED and the highest % of mold was Penicillium (at 69.7%) which explained why I had such a severe reaction as I am severely allergic to Penicillin (derived from Penicillium mold) & the majority of mold was not caused by the roof leaks but was pre-existing from the basement. 8/11/10 Husband was let go from his place of employment (while still on workman’s comp) for being unable to complete his entire realm of work.
On 8/16/10 JJ from JNJ Carpentry came out to inspect the property and provide an estimate for repairs to bring the house back to a code compliant habitable status. J noted several plumbing, electrical and structural issues that, in his professional opinion, did not meet code compliancy. I called the city and requested that a city inspector come back out and re-inspect the property. On 8/20/10 Greg Johnson, a St. Paul City Inspector, came out to the house to inspect the property. Greg wouldn’t officially comment but said that there were definitely issues regarding electrical, plumbing and structure. He seemed confused about several of the permits that were closed out as the men that signed off on them were supposed to have been previously laid off at the time of closing. He told Husband that he would need to check into the matter and would give us a call in a week. On 8/26/10 we received the estimate from JNJ Carpentry to repair the house at $78,407.
Now that we had “professional” opinions we submitted a final request to the Seller (including the bid from JNJ Carpentry) requesting that the Seller pay the exact amount of the bid so that the house could be repaired. At no time did we ever ask for any compensation for anything other than for legitimate repairs to the property. There was never a demand for compensation for nuisance repairs, lawyer fees or pain and suffering, despite my not being able to sleep inside the house for longer than a few weeks and eventually having to vacate the property and spend months away from my husband, or that the stress and issues regarding the house contributed to Husband’s injury and unemployment. Later that day the Seller sent this response to our final attempt to reach an out of court settlement.
From: John R. Beattie
Date: Fri, Aug 27, 2010 at 3:14 PM
Subject: RE: xxxxxxxxxx
I have reviewed the material you sent. Since we received your original letter, I and my client have been doing our own investigation. In short, we believe your client has orchestrated damage and bids to fraudulently assert claims that did not exist at the time of closing. To the extent some claims may have had a shred of legitimacy, which I do not believe, your client caused extensive additional damage in complete derogation of his duty to mitigate damages. The original work was done in accordance with code and passed inspection, by the housing inspector and the separate mechanical and electrical inspections. Unfortunately for your client, his new contractor apparently uses the subcontractors who worked on this project and who inspected the “damage”, finding the damage had been done subsequent to their original work. All of which was in order and passed inspection when done. If your client persists in these false allegations and claims, we will seek all redress available to my client, whether it be civil or regulatory, and we will involve the appropriate authorities from the City of St. Paul. Under these circumstances, my client will not negotiate because it did no wrong. Regards,
John R. Beattie
Greg Johnson, the city inspector, never called us back and we left several messages for him but he never called back. I was eventually able to reach Greg Johnson but he indicated that he didn’t remember ever saying anything about the permits or that he would contact us back, he told me to contact Carrie W. another city inspector. Carrie came out evaluate the electrical, but wouldn’t make an official comment either because there was no way to verify with the men who closed out the permit as they no longer worked for the city. The Seller specified on the Purchase Agreement that the basement had never had any water issues, that the roof had never leaked, that water damage had not occurred in any of the walls or ceiling and that there had never been any damage by ice buildup yet the code compliancy report required all of those issues to be remedied prior to selling the house.
The Seller did not allow us to perform invasive testing. At no time prior to closing did the Seller refuse to accommodate our requests for repairs, if he had we would have walked away from the property. The Seller did not have a certificate of Code Compliancy or a Certificate of Occupancy prior to closing and the property was a category 2 registered vacant property. The FHA inspection did not contain a site report and the pictures in the report of the interior of the property were of a much lower resolution than the exterior pictures and contained the logo of the MLA online listing site which could indicate that no appraiser went inside the property.
Invasive testing of this property indicates that recent repairs were made to several areas of the 2nd floor ceiling to remedy water damage as well as improper repairs to the west living room wall for water penetration. There is improper electrical (romex tied into tube and knob in new junction boxes without proper grummets) all over the house and the Seller’s contractors were aware of it, as indicated by the scope of their electrical work, but chose not to follow code compliancy. There was plumbing run in exterior walls without insulation, and no subfloor or waterproofing under the shower or tub. The mold from the basement was never abated and removed as required by the city prior to selling, as well as numerous other requests listed on the 2009 Code Compliancy report. The city requested waterproofing around the house was only half completed which did not resolve the moisture issue and allowed mold to continue to grow and flourish in the basement. The repairs to the west wall of the living room would have uncovered the lead based paint, but the flaking paint was merely painted over again and no mention was made of it by the Seller to us. The roof was repaired by the Seller in such a fashion as to make it impossible to re-repair and increased the amount of water penetration. The work done in and to the house was sub par and not to code and has resulted in a house that is inhabitable to both of us eventually. The Seller lied on the Purchase Agreement, did not follow through on the repairs he agreed to and illegally sold the property to us. Not only did the Seller fail to ethically and legally sell the property but our realtor, Barb, failed to protect her clients and responsibly guide us through our first home purchase. The FHA appraiser, John Hannahan lic#4001449, failed to provide a complete and ethical appraisal of the property as indicated by the over-looking of the leaking roof and structural deficiencies. Ricardo Cervantes and Stephen Uble from the City of St. Paul have verified that the house was indeed sold illegally by Jonathan Bruntjen who, as a currently licensed real estate broker was well aware that he did not have the legal right to sell the property. Lori Swanson, the attorney general, has tried three times to contact Jonathan Bruntjen regarding his actions with this property but so far he has refused to respond to her inquires. This house did not meet FHA standards as listed in the FHA appendix D requirements. This house should not have been allowed to be sold as it had no Code Compliancy or Certificate of Occupancy. No legal entities wanted to help get these issues resolved and we dealt with unpleasant surprises, health problems, extreme stress, job loss, unexpected expenses and displacement since April 2010. We watched our first home deteriorate around us. We did everything we could (physically and financially) to limit the amount of damage the leaking roof caused and to reduce the hazardous conditions in the house. Steps were continually taken to reduce the levels of mold and repair the structural damage to the walls. With the 2011 spring thaw, water penetration caused extensive new mold growth in the 2nd and 1st floor of the house. CBS local news came and did a story on us but it didn’t help anything.
The levels became far too high for safe living conditions and when Husband started to go crazy (literally) I went and dragged his ass to my parent’s house under threat of divorce and psychiatric committment. As of August 2011, Husband took it upon himself to gut the entire house so he could eventually biocide (mold killing spray) the entire frame of the house, all interior framing, floors & ceilings. Once that was complete he would be able to re-insulate and drywall. However the magnitude of this job would take months for him to complete. On October 31, 2011, days before the house was ready to be biocided, a fire started on the front porch. Husband (who had recently started sleeping at the house again in a sealed off back room) was awoken by an explosion on the front porch and was able to get out of the back bedroom without getting injured due to the plastic wall that he had put up in front of his bedroom door to keep demolition debris from entering his room. The plastic kept the majority of the thick smoke from penetrating the room and causing suffocation. The house was destroyed from a combination of fire, smoke and water/foam damage. Despite clearly needing a complete demolition and rebuild the fight soon began with our insurance company, who was under the impression it had just been a “small porch fire,” it was a fight that would continue on long into 2012. We had to fight for every penny and jump through ridiculous hoops to convince Travelers to honor the policy covering our property. As of April 1, 2012 Travelers dropped their coverage on our house, leaving us in insurance coverage limbo.
This concludes the first part of this story…the drama continues in part 2 when I tell you about the rebuild.