We bought our house in Oct of 2017. After a few months we started occasionally smelling something in the upstairs bathroom. I suspected a trap was being pulled dry and called in a plumber last week.

He said that there was no trap at all under the shower stall, and said there was no vent that he could tell, aside from the toilet stack, which nothing else was connected to.

Called the town to pull the permits to see who did the work, and there were no permits pulled for any interior plumbing.

In looking at the title insurance, my wife noted coverage for unpermitted work that the town requires fixed.

Based on this info, do you feel that we have a valid claim for repairs? Will the title insurance go after the owners that 'flipped' this property in 2015, or will we/do we have to go after them ourselves?

The first place to look is your copy of the Sellers' Disclosure. Go to the section about improvements made and permits. If the former owners/flippers deny knowledge, the source of the bad plumbing job needs to be tracked back by someone whether your Title insurance, or possibly a lawyer you hire for claim against former owner(s).

I forgot to mention that... We bought off a seller that bought the house and land in early 2017 to solely divide the land an build on the back half. they never occupied or did anything to the house that we didn't ask them to.

So we are looking at the previous owners (Whom records show bought in 2012 and sold in 2017) as that is the timeline for these repairs as well.

If the policy says it covers that, then you should file a claim. The procedure is usually detailed in the policy language.

I would be interested in knowing the type of policy it is. ALTA, ALTA-R, etc. Maybe it is unique to Maine or something.

If it covered, you can’t go after the responsible party as your rights are subrogated to the insurer who pays the claim. It might seek recoupment, or not as it choses.

I would suggest you start by getting a couple estimates to correct the problem. That will be required eventually anyway as any claim gets started.
I am not a lawyer, but have some real estate experience.

quote:

Originally posted by JALLEN:
If the policy says it covers that, then you should file a claim. The procedure is usually detailed in the policy language.

I would be interested in knowing the type of policy it is. ALTA, ALTA-R, etc. Maybe it is unique to Maine or something.

If it covered, you can’t go after the responsible party as your rights are subrogated to the insurer who pays the claim. It might seek recoupment, or not as it choses.

We have the ALTA policy. And I just want to make sure that there isn't some disclaimer (ie, only covers structure or land issues) as I didn't see anything in the policy like that.

I also understand not "double-dipping". I didn't mean anything like that. Just verbalizing the what-ifs. If the insurance doesn't cover it, could I go after the previous owners who did the work in gross violation of code?

My biggest fear is if the town issues a work order to fix it, and I can't come up the 8-10 grand to do so, could we lose our occupancy permit and be kicked out?

Are we responsible or do we have recourse? I've requested the assistance of local counsel, but am throwing it out there to Sigforum to make sure I'm not chasing a dead end.

There is no point in worrying about that now. Get a letter off to the title insurer ASAP. You might call the issuing office to verify the procedure for notice of a claim. Maybe they can save some time getting rolling on a determination. That will take long enough as it is. Mentioning the loss of use might incentivize some rapid attention. Part of your claim might be other expenses for a place to live.

If there is coverage, make your claim. Good that you have a lawyer.

You don't worry about prior owners, that is the insurer's problem. Listen to JAllen on this, it was his bread a butter. It is a little hard to see a theory of liability against an owner before the one you bought from. Those owners are strangers to you. But this isn't my area of law, so don't rely on me.

(I am curious how they can insure against unpermitted work as a matter of underwriting. How could they know about unpermitted work without a very comprehensive inspection and then a search of local permit records? Maybe they do that, but I've never heard of it.)

If you can see any of the plumbing work, look for a date code on the pipe. This might help if a prior owner claims they didn't do the work...If it gets to that point.

Our policy has a clause that says under covered risks
"You are forced to remove or remedy your existing structures, or any part of them - other than boundary walls or fences - because any portion was built without obtaining a building permit from the proper government office. The amount of Your insurance for this Covered Risk is subject to Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A."

We are reading that if the town forces us to be compliant to code due to the nature of the health risk, this will fall under the above guidelines. There are no exclusions listed to interior modifications.

Is it possible they used a Studor Vent? It's a one way valve used where you can't gain access to penetrate a roof. If so maybe it's stuck?

As far as title insurance, I wouldn't bet on getting a penny from them. I recently had customer who had to rip out over $10k in newly installed fence. Agent and title insurance CO said no HOA. My customer has horrid tastes and neighbors started complaining. They were able to find where previous owner made some payments to HOA, there was nothing in writing indicating he joined the HOA. The previous owner had sold the land for neighborhood, but kept his house in the middle.

They called agent and title insurance company and were told that it was not covered. Seems like determining if a house was or was not covered by HOA is something that should have been checked and covered.

As I understood from the plumber, a Studor Vent needs to be accessible, and we traced all the plumbing and could see no indication of anything like that.

Also, we ran water in the shower to attempt to fill any dry trap, then ran the water in the kitchen sink. We immediately heard the water drain from the shower drain, indicating no trap. No glug-glug of it pulling the trap dry, just the sound of air/water through the drain pipe.

If there were no permits pulled it's is possible the non-existant inspector missed the lack of access. It may (if you are that lucky) involve cutting in an access panel and replacing valve.

Just spitballing here as my plumbing knowledge isn't even enough to get me in trouble.

quote:

Originally posted by jhe888:

(I am curious how they can insure against unpermitted work as a matter of underwriting. How could they know about unpermitted work without a very comprehensive inspection and then a search of local permit records? Maybe they do that, but I've never heard of it.)

Hisotrically, title insurance was written on a risk discovery and avoidance basis, IOW, search a title plant built from public records, get the chain of title, examine the docs, look for forgeries, missing signatures, underage, etc. There were loss of priority issues, where they sometimes just took the chance, very expensive!

That began changing in the 1970s and more and more forms began taking on things like zoning violations, off record matters one could not find in public records, especially in loan policies. ALTA Residential really added quite a bit of that to coverages.

The ALTA Homeowners (1/1/08) is what I think he has. There are all sorts of non record coverages. Most searching, if that is what it can be called is done offshore now, in Malaysia, Sri Lanka, Philipines, etc. Some of those are pretty rough. Competition being what it is, it may be that it is thought best to cover all sorts of things, get the business and hope for the best.

Thanks, JAllen.

quote:

Our policy has a clause that says under covered risks
"You are forced to remove or remedy your existing structures, or any part of them - other than boundary walls or fences - because any portion was built without obtaining a building permit from the proper government office. The amount of Your insurance for this Covered Risk is subject to Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A."

ItooANAL, but that sounds like a very narrow snippet perhaps more meaningful in full context. It sounds like something intended to deal with part of structure being outside the bounds of your property lines, not some unpermitted work inside the property.

I have never heard of, expected or imagined that a title company was insuring anything inside the four walls for being properly permitted. That's nearly impossible to determine. IOW that's a home warranty issue, not a title issue.

Regardless, you'll get pretty clear feedback from both the title company and your own attorney if one is retained.

These are strange and perilous times, and few of these coverages were offered when I was a title company counsel..... 30 years ago, and certainly not ~45 years ago.

The only way to know is to present a claim and see what the claim guys say.

I had a claim presented one time where a lady had a hail storm tear up her roof, and wanted the company to replaced her tiles.

Hey Gibb - what was the outcome of this?