Neither the real-estate agent nor my attorney told me the house failed the water inspection, and during the final walk-through I didn’t know to look for a new septic system. Should the title company have caught these things?
A: The title company is responsible for searching the “chain of title” of a particular property to make sure the history of who owned the property through the decades is known.
The title company is there to make sure that, when a buyer closes on the property, the buyer has an assurance that the buyer is the rightful owner.
The other part of what the title company does is disclose all matters that affect the title to the property, such as liens, easements and other restrictions that are on the title to the property.
Septic systems are not matters that affect the title and would not come within the scope of what title companies cover.
The person who should have told you about the septic system was the seller, and if not the seller, then the professional home inspector you hired (or should have hired) to scrutinize the property before you finalized your offer.
Furthermore, in quite a few areas, septic systems are necessary and their existence is common knowledge. If you didn’t know that septic systems were common where you were buying, your home inspector should have known.
At the very least, the question should have been raised ahead of time.
In areas where septic systems are prevalent, many real-estate contracts have a provision that addresses their existence and conditions.
The agent and the lawyer should have made clear that the property failed its water test, but we think you should have been driving that bus.
Furthermore, there are different kinds of water tests. You might have a water test for lead in the water, or you might have well water in the home and the test was for the well water.
And finally, you’d have a test for the septic system, but that usually is not referred to as a water test. You should have asked for the results and made sure you understood the implications. If you mean that the septic system failed the test and the seller knew, or should have known, that the property was on a failing septic system, you may be able to argue that this was a material defect that should have been disclosed to you before the closing.
You should discuss the issue with a litigation attorney who has had experience with your state’s seller-disclosure rules and see what options you have.