3 bedrooms or 4? Septic permits and litigation

[Bobby Bucks]

My apologies if this is a boring topic, but I’m curious if others have encountered this and if so what the results were. I’m using 3 and 4 bedrooms as an example. Hopefully, this may prevent someone from getting into a nasty legal situation. I’ve had numerous assignments of properties which have septic tank permits for 3 bedrooms, however, the floor plans are clearly for 4 bedrooms. It’s the “wink and non” builder approach where the property is originally marketed as a 3 bedroom with a flex room, study or other description. Often when these properties are sold again, the agent lists them as 4 bedroom. Most buyers consider them 4 bedrooms due to flow and they are purchased and sold again as 4 bedrooms. An agent I know is being sued because he sold one of these and the current owner is upside down, hired an attorney and they're suing and dragging everyone into court except the cable guy. He should have checked on this property because it’s less than 10 years old and permits were available. So, with all this being said, what do others do to preemptively to avoid possibly litigation? Naturally the newer the home, the more likely permits will be available. How about properties built 60 years ago? Another similar type property is an older home with an additional which is a 4th bedroom and it is only permitted for 3. Some properties are very easy to verify permits on, others are not so easy. Are we expected to pull permits for every property which has a septic tank to match the bedroom count with the permit?

 

[ucbruin]

"An agent I know is being sued because he sold one of these and the current owner is upside down, hired an attorney and they're suing and dragging everyone into court except the cable guy. He should have checked on this property because it’s less than 10 years old and permits were available."

Just curious....
Has the agent provided any credible defense?

 

[J Grant]

I don't match permits to bedroom count - perhaps worthwhile but imo out of my obligation - that said many RE agents exaggerate bedroom count and it is easy to check original bedroom count on public records vs MLS ( and what we observe ) I always call the additional flex/den rooms what they are and state in addendum some buyers furnish them as bedrooms and many MLS listings show it as a bedroom, however it is a flex room/den.

Some appraisers think like RE agents and try to get the max price or max bedroom count in an appraisal... likely the inflated price and value is why the buyer ended up underwater , but the septic tank /# bedrooms was a reason to collect $ since value is more subjective...an agent may get sued for a different reason than an appraiser- amazing more don't since their many of their listings are a fantasy land of invented rooms, invented views, invented sf, and so on..

 

[Bobby Bucks]

Just curious....

Has the agent provided any credible defense?

He’s guilty and isn’t hiding the fact. He’s embarrassed more than anything. He gave the listing to a new agent/assistant at a busy time and didn’t adequately critique the listing information. He’s hoping to settle out of court and avoid the publicity and aggravation. I’m curious about the appraisal, but he doesn’t have any info on that. There are probably millions of properties/loans out there that are similar.

I don't match permits to bedroom count - perhaps worthwhile but imo out of my obligation -

As a rule I don't either unless it's an an area/subdivision where the "flex" room has gained attention.

 

[J Grant]

however, the floor plans are clearly for 4 bedrooms. It’s the “wink and non” builder approach where the property is originally marketed as a 3 bedroom with a flex room, study or other description. Often when these properties are sold again, the agent lists them as 4 bedroom. Most buyers consider them 4

There was no "wink and non" from the builder- the last thing a builder wants is to get sued and thus on their floor plans they label that room as a den or flex space and the model as a 3 bedroom plus den. The fact that later on RE agents market it as a 4 bedroom has nothing to do with the builder .

 

[Mr Rex]

RE agents are real sensitive to it around here. I remember one lake front property that was listed as 3 bedroom 2 bath. Sleeps 25. They are called "Undesignated" rooms in the MLS. One county code authority does not allow a closet in these "Undesignated" Rooms, so there is typically a closet just outside the room etc. Most agents include the septic permit in the documents addenda in the MLS. For refis I typically ask the borrower if they know how many bedrooms are permitted on the septic.

 

[Terrel L. Shields]

We have a big development called Bella Vista, which is a town as well. Many of the lots failed to perk very well and were rated for only 1 or 2 bedroom houses. So the architects have sewing rooms, rec rooms, etc. rather than call it a bedroom. Septic is sized on bedrooms by state law. One locally a few years ago was sold as a 3 bedroom house but had a permit for only 1. The homeowner had immediate septic problems. A broker was sued and ended up buying the house. I appraised a new construction and it was 2400 SF with a single "bedroom". So I go on each and every assignment to the Architectural Control Committee office and pull the septic plans and call it what it is...After all, I worked there in the early 70s and knew what shoddy sleazy things the engineers did to get around the law. Metal septic tanks, up hill pumps, etc. I wouldn't buy a house there on a bet.

 

[Bob Ipock]

While the permit is for 2,3 or 4 bedrooms, the actual issue is the bathrooms and how many that toilet gets flushed. The theory is that there will be more people living in a 4 bedroom than a three bedroom which is not always the case. My house is 2,800 s/f 5 bedrooms and 3.1 baths. It is just my wife and I living in the house now and my wife makes me use the bathroom at the convenience store close by. I do buy toilet paper for their bathroom.



I actually just had a case like yours that was settled out of court. Brand new house sold as a three bedroom. All bedrooms have folks in them. Soon after moving in the septic tank started overflowing. The county had issued a permit for 3 bedrooms. Should have been for only 2. No possible financially reasonable to fix it.

Buyer sued everyone, agent, county, builder, appraiser, home inspector ….everyone. My task was to develop an opinion of diminished and decreased value of the property.

 

[Bob Ipock]

While the permit is for 2, 3 or 4 bedrooms, the actual issue is the # of bathrooms and how many those toilets get flushed. The theory is that there will be more people living in a 4 bedroom than a three bedroom which is not always the case. My house is 3,800+ s/f 5 bedrooms and 3.1 baths. It is just my wife and I living in the house now and my wife makes me use the bathroom at the convenience store close by. I do buy toilet paper for their bathroom.

I actually just had a case like yours that was settled out of court. Brand new house sold as a three bedroom. All bedrooms have folks in them. Soon after moving in the septic tank started overflowing. The county had issued a permit for 3 bedrooms. Should have been for only 2. No possible financially reasonable to fix it.

Buyer sued everyone, agent, county, builder, appraiser, home inspector ….everyone. My task was to develop an opinion of diminished and decreased value of the property.

 

[CANative]

Most buyers consider them 4 bedrooms due to flow ...