When the Magbee-Jaje family found an affordable home in Spring Hill, they were overjoyed. The house had plenty of room for their five children and, after three years of searching, the family was ready to settle into their new neighborhood. Their joy was short lived, however. Soon after the move, Kelly and Thomas found out that there was a sinkhole under their home. To make things worse, a few short months after purchasing the home, their insurance company cancelled the policy they had previously issued.
The previous owners failed to tell their real estate agent that the home not only had a sinkhole, but that the insurance company had paid them $153,745 to cover the cost of sinkhole repairs. They cashed the check, never repaired the home, and walked away with a large sum of money which they put into their new waterfront house just down the street.
There were many points of failure from the professionals handling the sale of the property, starting with the real estate agents who did not catch the sinkhole claim, or simply failed to disclose it. Home inspectors who saw the minor cracks in the ceiling and stucco said they were due to settlement.
Florida law requires that homeowners disclose a sinkhole claim when they sell a home. Real estate forms specifically ask homeowners to disclose information about sinkholes. The previous owners answered “no” to every sinkhole and settlement-related question on the form.
The insurance company reinstated the policy they issued to Kelly and Thomas but the policy does not include sinkhole coverage. That means the home will have to literally be swallowed by a sinkhole before the insurance company could do any repairs. Without sinkhole coverage, Kelly and Thomas have no way of stabilizing their home other than paying for the repairs out-of-pocket.
The best advice to consider is that if you are buying a home in an area known for sinkhole activity, make sure that your real estate agent does a thorough check for any sinkhole claims against the property. If you have any questions or concerns make sure you address them before you purchase the home.