Kitec Plumbing and Litigation?

[Betty H Church]

Anyone have any experience with homes with Kitec plumbing? I have been asked to appraise a home for purchase and the MLS listing indicates there is Kitec litigation involved. Do I just mention it, check for any market resistance, and move on? Are there any particular CYA statements that I should make other than not being an expert in such matters?

 

[Vegan702]

I have done a few. I usually had other comps in the neighborhood affected with the same problem also in case you need to extract an adjustment. I just described the situation concerning there may or may not be faulty plumbing, etc. just like with all the condo litigations we have ongoing here. I don't know your house particulars, however a house I looked at to purchase was 2700SF 3.5 baths and it was approximately $8k-$10k to fix the Kitec issue.

 

[Betty H Church]

Thanks for responding. I would imagine most of the homes in the same tract, built at the same time by the same developer would have the same problem. The rareity is when an agent admits to it in the MLS.

 

[Vegan702]

Most probably don't mention it due to the cases being resolved and the problem already being corrected. All of Sun City Anthem had a similar issue with the plumbing and I hardly ever saw it mentioned in the listings. However the plumbing company who installed it was replacing it all, so there really wasn't too much to comment about. There is a community in the NW off of Grand Teton/Durango that has a similar problem, however they have already settled the case and most homeowners have had the plumbing replaced, however some of them took the $8k and walked away with when their house got foreclosed on. In those cases since you don't know if the plumbing was replaced I just make a comment about it in the report.

 

[Carnivore]

Thanks for responding. I would imagine most of the homes in the same tract, built at the same time by the same developer would have the same problem. The rareity is when an agent admits to it in the MLS.

Yes, you have geocompetence that a Ivory tower out-of-state reviewer will never have. Thats important because your going to need to know this problem well. Why, because the AMC/Lender/reviewer are going to go ballistic when you kill their deal with excellent professional service.

 

[Betty H Church]

Original P/A states - Seller agrees to replace the Kitec plumbing fittings throughout subject prior to COE. In event repairs are not performed, Seller agrees to credit buyer $8K in lieu of repairs at COE. Seller not paying any closing costs.

Addendum to P/A states - Buyer to waive any and all contingencies regarding any and all Kitec plumbing fittings and hold harmless the Seller. Seller not paying any closing costs.

Original P/A @ $165K Addendum @ $158K = $7K difference

Question? Would you include this on Page 1 of 1004D as a concession?

 

[Webbed Feet]

Original P/A states - Seller agrees to replace the Kitec plumbing fittings throughout subject prior to COE. In event repairs are not performed, Seller agrees to credit buyer $8K in lieu of repairs at COE. Seller not paying any closing costs.

Addendum to P/A states - Buyer to waive any and all contingencies regarding any and all Kitec plumbing fittings and hold harmless the Seller. Seller not paying any closing costs.

Original P/A @ $165K Addendum @ $158K = $7K difference

Question? Would you include this on Page 1 of 1004D as a concession?

Sorry nobody tried an answer here for you sooner....

First, I am lost why you are referring to the "1004d" form! ... Next, the "concessions" we report are financing concessions, not price reductions. If anything, that simply becomes one of the many justifications for adjusting for comps where the fittings have all been replaced already at the time of sale, or as part of the sale, of the comparable.

Also, reading that, I would immediately call my client and explain the impact of them possibly later foreclosing on a house where the buyer took the better price and then never replaced those fittings. I would, in writing, be very strongly recommending my client ask me to "Subject To" a professional inspection of all the fittings with a EA they will be found to be servicable and appropriate for the life of the loan. I might immediately decline the assignment if they will not agree to such an EA. I'd have to think about that. Just lowering the price by the cost of replacing the fittings has nothing at all to do with the expenses of the possible water damage if the fittings should fail. Hidden damage from same could make $8,000 look like a warm up.

Of course, if I get this issue correctly, the client will find it impossible to get any other professional to say that.......

 

[Betty H Church]

Better late than never - Thanks Web. The 1004"D" was a screw-up. I meant 1004. And, after much thought and checking with others, I came to the same conclusion. When I originally posted, I had not yet talked to the selling and buyer's agents for the comparables in the same development. I included a paragraph about what was going on in the development, and included the quote from the purchase contract that the ""Buyer waives any and all contingencies regarding any and all Kitec Plumbing Fittings and hold harmless the seller." I left it in the U/W ballpark, I hope. The issue does not appear to be affecting the sales in the development.

 

[Webbed Feet]

Better late than never - Thanks Web. The 1004"D" was a screw-up. I meant 1004. And, after much thought and checking with others, I came to the same conclusion. When I originally posted, I had not yet talked to the selling and buyer's agents for the comparables in the same development. I included a paragraph about what was going on in the development, and included the quote from the purchase contract that the ""Buyer waives any and all contingencies regarding any and all Kitec Plumbing Fittings and hold harmless the seller." I left it in the U/W ballpark, I hope. The issue does not appear to be affecting the sales in the development.

I sure hope you seriously ramped up your addendum about your exact level of inspection and not being able to determine anything about hidden damages due the possiblity of leaking hidden plumbing connections.... and proved that no market reaction could be extracted...

 

[Betty H Church]

Hi Web. The property had already been inspected for the Kitec plumbing issues and the seller and buyer were both aware of them. The drywall had been removed to expose the pipes in the garage and I included a picture of that in the report. I stated that I'm not an expert in this arena and if anyone has any questions, an inspection should be made by a qualified person.