Q. We bought a home in June. The previous owner threw in a home warranty, but we insisted on a home inspection and the seller agreed to one recommended by our agent. The home inspector found no major issues worthy of correction before the sale, but during the inspection he called me over to the sump to show me the pump and back up system and how to verify operation.
At the closing we were presented with an illegible copy of the home warranty and told the actual certificate would be mailed to us.
Eight days later during record rain, the sump pump failed and the backup failed as well. We had flooding in the basement, so we called a plumber. After making the emergency repair we contacted the warranty company. They informed us that since we had violated the terms of the home warranty (we had to call them first), we would not be covered. We appealed, and they said there were no appeals. Repeated calls to upper management brought no relief. To add insult, the home warranty certificate arrived about two days later.
Part of their argument was that we failed to prove the sump pump was not in working order.
Is the home inspector liable for not finding the flaw? Do I have any recourse against the home warranty company?
A. These days, many residential real estate transactions include a provision whereby the seller purchases a home warranty for the purchaser. These warranties have different levels of protection depending on which plan is selected. Most of the warranties have a term of 12 or 13 months and can be extended at the purchaser's cost.
When I represent purchasers, I make it a point to inform them that if they have an issue they believe is covered under the home warranty, to contact the warranty company first. This is a standard provision in virtually all warranty agreements. The warranty company then sends one of its contractors to address the problem.
It is done this way, I presume, for two reasons. One, the warranty company can directly determine whether or not this is a covered problem. Two, I imagine they have agreements with certain contractors to pay a reduced fee in exchange for the referrals.
So, by repairing the problem yourselves, you eliminated the warranty company's ability to investigate the cause of the flooding and further incurred a repair cost likely in excess of what they would have paid. I'm not a fan of criticizing my fellow professionals, but between your real estate agent and your attorney, someone should have informed you of this critical provision in the warranty agreement, especially given the fact that you were not presented with a clear copy of the agreement at closing.
As for any relief available to you now, sorry, I don't have much for you. Sump pumps fail all the time and a common characteristic of sump pumps is they are working fine one minute and are inoperable the next. Most inspectors will tell you there generally is no way to determine the condition of a sump pump and that a homeowner should simply replace their sump every so many years. So, I don't see any relief against the inspector.
As for the warranty company, you apparently violated a basic term of the warranty contract. No one can fully assess your legal standing on this issue without reviewing the warranty agreement, but my guess is, you're cooked.
• 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.