Sewer Backup in lender owned property

My day starts out with a phone call from a neighbor that lives in a condo next to my REO listing.
There is a problem she says “the main sewer line has back up in the building.” The building consists of 4 attached town homes all units have full basements and 2 car attached garages. Mine is under contract and scheduled to close in 2 days. List price had been reduced down from $129,000.00 to $84,900.00 it’s been on the market for over 6 months and we’ve had two buyers walk away from their contract. So that’s the background.

Now back to the situation at hand. Neighbor calls and says there has been a bad sewer backup and offers to go inside my listing to check it out to see if there is any damage. I no sooner hang up the phone when the management company calls to let me know of the situation. Obviously this is serious. And I am thinking oh great we are closing in 2 days. Or are we? So I immediately call my contractor who is just getting ready to walk out the door for another job. I have a good relationship with him so he puts the other job on hold and goes over to the condo to find the unbelievable mess of this sewage backup. He calls me back as he is walking down the basement steps and see that the basement has 4 ½ inches of raw sewage floating everywhere. The stench was awful. How on earth did this happen? The property is vacant the water is off because it has been winterized. My contractor is just standing there looking at this mess completely beside himself he has no idea where to begin. He is in complete disbelief at what he is looking at and he says to me “I want the job” how on earth would anyone want that job? Yuck double yuck.

So of course my next step was to call the asset management company. My first contact didn’t answer the phone. I didn’t even leave a message I called my second contact person. When she answered I was so glad that I wasn’t going to have to leave a voice mail or send an urgent email. That could have taken hours for a response. I explained the situation and she immediately called the seller which is a bank. Fortunately he also answered the call. He said start the clean up process you sure can’t leave it. So the clean up began. Meanwhile I called the property management company back to get more details. Jim at the management company tells me they have already called Rotor Rooter to clean out the line. They also called Cincinnati Sewer to have them check their lines. I asked him who is going to pay for this damage. Well, he said it is not our responsibility it is up to the individual home owner to contact their insurance company. Well that’s just great most lender owned properties are not insured.

The neighbor two doors down had a finished basement which was their family room. They called in a restoration company. The other neighbors also had to call restoration companies. Charges are over $3,000.00 per unit just to clean up the mess. And the management company does want to take any responsibility?

My contractor calls a friend of his who also has a restoration company to help him with the clean up. Charlie comes right over and they begin the clean up. They worked all day and well into the evening hours shoveling out human feces. They also had to remove insulation and some drywall that had gotten saturated with sewage. They carried out 40 contractor garbage bags out of there. They now had a good start on getting things back to normal.

Day 2 begins and now I have the bill to present to my asset manager. It is a little under $3,000.00 in the beginning no one knew how extensive this was going to be. Of course I immediately emailed it to my asset manager and make the call to discuss the situation. Remember the management company is not taking any responsibility for this and the seller does not have insurance so they of course are hoping that the management company is going to participate in the cost of clean up. Here my contractor has already cleaned up the mess, seller said clean it up and I having a hard time to get his bill approved.

So I start making some more calls. First call the management company again. No answer. So I call Cincinnati sewer department. I am told they went out and checked their line and it was clear. They are not responsible it is the management company. When the building was built it was built with only one tap into the main sewage line, so all the units are connected. In my opinion how stupid was that? Builder cutting costs is what that is all about. Now I’m back to the management company. How can they not be responsible for this? Jim tells me they are getting a bid to correct the problem from the plumber. And their insurance company may possibly pay the claims. He gives me their contact information which I of course relay back to my asset manager.

My asset manager thanks me for all my extra work and tells me she appreciates my extra effort because most REO agents don’t go the extra mile.

The contractor is still hard at work with day 2 of now the second wash down which is micro be gone and Clorox to kill any kind of living organism and believe me nothing could have possibly lived in that basement once he cleaned it with that stuff. I went over to take photos for the seller and arrived just as he had finished cleaning down the basement and after walking in I had to turn around and walk back out. My throat felt like it was on fire and not to mention how bad my eyes where burning. I needed a mask just to go into the basement to take some pictures. Once I had the mask on, and the doors and windows where open I got my pictures and left. That was enough for me as I am driving away I wondered how on earth could the contractor stand to be in there breathing all those chemicals?

So I get back to my home office to email these photos back to my asset manager. Oh did I mention she left the office early today for vacation? Wonderful, things are already a total mess. Not to mention I haven’t been able to get a hold of the selling agent to let his buyer know what happened. Tried to call him, sent him emails, left voice mail messages. And guess what I still haven’t heard from him and it’s now 12:40 A.M. I have no idea if we will close in the morning at 10:00

Once I sent the photos I did get a call from the asset manager handling business for Stephanie. I thought she was supposed to have been filed in on the details but of course she wasn’t. I had to relay everything once more to her and also let her know I have been completely unsuccessful getting a hold of the selling agent.

The contractor will still be working in the condo tomorrow. The dry out process for this job will be at least 3 days. They figured there had been about 1,000 gallons of water in the basement of course that includes sewer water and clean up water.

I want to add one more thing the buyer had a whole house inspection and the seller has already made repairs to the property. Of course something like this could not been picked up on by anyone.

If you have REO stories or would like to ask questions about REO properties I would like to invite you to join my group at www.squidoo.com/group-foreclosureproperty

Here are the after clean up photos.