Q. My husband and I bought our first home about a month ago. During our home inspection, the inspector determined the furnace was in poor condition and required servicing. Our attorney sent a letter regarding this and the sellers agreed to repair the furnace. At the closing, they gave us a receipt that showed the furnace had been serviced, costing them $129.
Last week, the furnace quit working. We called the company that did the work for the seller and they now tell us the furnace is shot and there is no use in attempting to fix it. We, of course, asked the repair guy why it was fixable just a few weeks ago and now it's beyond repair. He would not comment, but said the employee who was out last time is no longer with the company.
It certainly appears to us that the sellers worked something out with the first repair guy to keep the furnace going until closing. We are getting quotes of more than $2,000 to replace the furnace, which we don't have. What options do we have, if any, in recovering this expense?
A. The sellers likely made three representations to you regarding the furnace during this transaction. One, they represented that the fixtures and personal property were in operating condition on the date the contract was accepted. Two, they represented that they would service/repair the furnace pursuant to your home inspection contingency request. Three, they represented they were not aware of any material defects in the heating system (through the Real Property Disclosure document).
As it appears, the furnace was continually operational until the day it quit working. Proving the sellers misrepresented that the furnace was in operating condition on the date of acceptance would be difficult.
The more likely opportunities for recovering some or all your costs would be through either the seller's representation that they would repair the furnace, their representation that they were not aware of any material defects regarding the furnace, or the substandard work performed by the heating contractor.
As you did not retain the heating contractor, it may be difficult to obtain relief against them, though a creative attorney may seek relief under a third party beneficiary theory. The more likely scenario would be for you to bring an action against the seller, who may then bring in the heating contractor.
To prevail under a theory that they made a material misrepresentation under the Real Property Disclosure, you would be required to establish the defect existed during the seller's ownership, that the seller was aware of the defect and that he or she failed to disclose the defect to you. The problem with this theory is that the defect was brought to light as a result of the home inspection. How do establish you were unaware of the defect when your inspector told you it existed?
So, this probably leaves you with a breach of contract action against the seller for failing to perform the work they said they would perform, which was service or repair of the furnace. The language in the correspondence between the attorneys may come into play here. Did the sellers represent they would repair the furnace? Did they represent they would service the furnace? Did your attorney request the furnace be serviced and repaired? Cases often hinge on such details.
The starting point here is to have your attorney send a letter to seller's attorney indicating what has occurred since closing. An invoice from the heating contractor stating the furnace is shot should also be included. Indicate that unless some resolution is reached regarding the cost of replacement, you intend to seek legal action. This may result in a negotiated resolution all can live with without the cost and aggravation of litigation.
• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to email@example.com or call (847) 359-8983.