House Calls: Wet Basement
Dear Ms. Lank: I bought a house two years ago for which the seller's disclosure form answered "No" to questions about wet basement problems. It was a bald-faced lie.
I called a lawyer from one of the area's premier firms, and he told me: "Yeah, the seller lied, and if you sue, you'll probably win. But it'll cost you more than just repairing the problem and you'll still have to repair the problem. Caveat emptor."
So I bit the bullet and paid nearly $6,000 to fix the water problems in the basement. -- R. Y.
Sorry to hear this. In your state the statute of limitations for small claims court is three years. You still have time to hear what a judge would say there. The dollar limit might not completely reimburse you, but you could appear without a lawyer, representing yourself. It might be worth trying.
Dear Ms. Lank: You did a great job of explaining how mortgage escrow accounts function in your answer to a writer who wanted to know why a small balance is left at the end of the year.
You might want to mention that the bank (at least in my area) is required to pay interest on amounts held in such escrow accounts. And where I live, the interest the bank is required to pay is 3.5 percent -- far higher than could be earned on ordinary deposit accounts, or even on CDs.
Thus, I'm happy to have the bank keep a balance in my mortgage escrow account! -- J. M. G.
Thanks for the information. You're right when you suspect that not all banks are required to pay interest on money they collect to pay homeowners' future tax and insurance bills. In 3 out of 4 states, escrow deposits are held interest-free.