One that Almost Got Away

Editor’s Note: How do you tell a single-family residence from a manufactured home? Very carefully, as inspector Russell Kirk explains.

One that Almost Got Away

by Russel Kirk

I had my most satisfying inspection today. I always pull the public records prior to an inspection and this one showed a 979 square foot (SF) single family residence (SFR) built in 1972. The buyer’s agent told us that it was a 1,500 SF SFR, confirmed by the listing agent’s flyer as a 1,498 square foot SFR.

When we got to the inspection, something just didn’t look right. The stuccoed foundation was huge, about two feet tall; very unusual. The rear had cracks every four feet, again very unusual. It looked like a raised foundation at the right and rear but with a tall slab at the front and left. Weird. There was no access to the crawl space.

In looking at the cracks at the rear, I decided to take off one of the vent screens to see what I could see. We typically don’t remove vent screens since we usually have access via a crawl space opening.

Well, low and behold. A manufactured home! The cracks at rear were where the skirt sections met. They were metal but had been stuccoed to match the rest of the house.

The buyer and buyer’s agent were aghast, not to mention pretty angry. The reason? The house was selling for $475,000, definitely the price for a 1500 SF house in that neighborhood (San Diego, Calif.). The most expensive manufactured home in San Diego County that I could find, however, was $175,000 and that was for a 2300 SF, 2004 double-wide, double-long, double-tall, double this, double that model! That’s a $300,000 difference. Whoa! Of course, now that I had opened the can of worms, the home would never appraise for $475,000.

The interesting thing is that the current owners paid $235,000 in November 2000, and the owners before them paid $165,000 in June 1994, all normal prices for 1500 SF houses in this neighborhood at those time periods.

Conclusion? No one ever had the home inspected before and had no idea that it was a manufactured home.

The current owners are within their five and half year discovery period, so I see a lengthy lawsuit, which may lead nowhere depending on where the 1994-2000 owners currently reside and what they claim they did and did not know.

Liability Nightmare
In this part of the country, if there’s a lawsuit, everyone even remotely involved is sued. Now where would I be if I had not taken off those vent screens and just disclaimed the crawl space because there was no access? Notwithstanding anything I might have said in my report about further evaluation by structural engineers after access is gained, etc., I can guarantee you that I would be part of a lawsuit down the road when someone found out that it was a manufactured home.

The $300,000 in potential damages is a significant amount of money, and even if I were found to be one-eighth liable (seller, seller’s agent, former seller, former seller’s agent, home inspector, title company, throw someone else in for good measure), that would have been $37,500 minimum, with court costs not included. And if the former seller has moved to a different state and the former seller’s agent dead or can’t be found, I could be one-sixth liable – $50,000 or more. And it could get worse, much worse. That’s why I carry E&O insurance.

I suspect I’ll be doing another inspection for them quite soon.

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