My client recently closed on a home and found out after the fact that there was leaking plumbing underneath the home in the slab foundation... It's a $3000 repair... i had advised them to do a home inspection during the process but they declined... However, these were some great clients who have referred two more of their friends to me... I feel real bad about them having to deal with this and i'm thinking of offering to pay half for them... i know there are rules and limitations about kickbacks/gifts to clients after closing... would me paying this for them be in violation to anything??? would i be able to write this off as a business expense at the end of the year?

I'm not sure if the gift/kickback rules would apply, although I will be glad to hear what others have to say about it. However, I would NEVER, NEVER, NEVER offer to pay for a repair that could have been discovered if they had done their due diligence. You recommended a home inspection. They didn't do it. Not your fault or your responsibility.

Yeah I realize that I'm not obligated to but these were just great clients. They're not expecting it either but they have just been great to me. The referrals.. They even got me a Christmas present during Christmas prior to getting an offer accepted. They speak highly of me to referrals.. In the long run this may be a good thing..

I would be worried about them telling the referrals of your generosity. The referrals may expect the same to be done for them.

If this was a pre-existing issue, the question you should be asking is whether there was a failure to disclose on the part of the former owners? Plumbing issues under a slab foundation is certainly a latent defect that should have been disclosed. If the sellers knew of the problem and failed to disclose, they are the ones who should be paying.

It's too bad that your clients did not opt for a home warranty at closing.

In regard to the home inspection, many companies require clients who opt not to do a home inspection to sign a waiver. The mere existence of the waiver helps emphasize the importance of the inspection process, and it probably helps protect the agent as well as the agent's conscience.

Even making a "token" contribution towards the repair can be interpreted as being an acknowledgment of responsibility in some jurisdictions. I'd check with my Attorney about case law in California.

And I'd also be interested in knowing how they expect to make that repair for as little as $3000.00? How old is the structure? If it's galvanized or copper piping within the concrete, it's doubtful that it will ever really be repaired in a reliable manner. These jobs tend to grow in scope, and costs escalate, once a contractor has secured to work and done his initial exploratory surgery. Are there cracks? Was it damp before they bought? This kind of piping is often abandoned in favor of finding an alternative route, above or around the concrete . . . . and consider yourself lucky that this is in California where you'll (they'll) have more options than we would in a colder climate.

But . . . . I also hope I wouldn't let my curiosity wander too far into wanting to know so much about the problem that it appears that I bear some kind of responsibility either. That conversation with my Attorney would be my first step.

Our P&S has a pre-printed reference to the Building Inspection, and the Purchaser has to "actively" state that s/he has chosen to forego having a Building Inspection conducted. (Actually, few of our inspectors are equipped to pressure test such embedded piping anyway).

Maybe your Attorney can recommend a "safe" way for you to recognize their predicament. I'm glad you are experiencing those feelings of "wanting" to help; but do it carefully.

This would be unprofessional conduct. You don't pay to repair a clent's home, it's just misguided. Take them out to dinner? Fine. Bottle of expensive wine? No problem. Do repairs on their home? Not appropriate. Being nice is one thing, offering to repair a clent's home out of some misplaced guilt is not a smart move.

It was a pre-existing issue but the seller can just claim they never knew of it since it was a flip. Only way buyer knew afterwards was that her kitchen tiles would warm up when the hot water is used.. Buyer did sign inspection waiver but as I've mentioned it's not something I'm doing out of any guilt for any reason.. Just feel bad for the buyer... 3000 was for the plumbing to be replumbed into the attic. A contractor suggested that instead of repairing the old pipes underground, which could break again at another location and leak also since it's old...

I bet they won't decline a home inspection again!

Ok, so no HI on what was basically a flip. Was there a home warranty purchased? Something like this may be covered, but not 100% sure. It's sort of silly not to get a HI (or a HW for that matter, I live & die by HW's, lol) HI's are pretty crucial when done by qualified inspectors, water over the bridge now though.

Footing part of this repair bill would be a bad idea for a couple of reasons. Putting yourself in the middle of said repair could, if something goes wrong, show that you're responsible if the buyer has to go to court. That's actually the minor issue here. As you've said this buyer has already refered people to you, by giving $$, you could get popped for: giving a kickback not on the HUD-1, giving a referal fee to an unlicensed person, generally giving $$ to an unlicensed person, paying for a repair not on the HUD-1 - which in turn could maybe cause the buyer to get busted on their loan for fraud.

So... Probably not a good idea. If anything, this is best taken up with the seller, if they actually knew about it. Or, the buyer just takes care of it, and moves on.

Please bear with me; but I'm still trying to get my head around this issue and what is actually leaking.

So the floor tiles get warm? Through the usage of the domestic hot water?

Do the floor tiles also get wet?

I'm wondering how a Building Inspection would have detected that anything is wrong?

We have reasonably well qualified Building Inspectors around here, and they might inspect for leaks evidencing themselves with wetness, low water pressure, wet spots, continuous drips, stains on plaster ceilings or walls, floor tiles that are lifting (or becoming detached), rotted wood, squirting water where you don't want squirts, (sometimes geysers in the back yard) . . . . stuff like that. But what kind of test would reveal "warmth" in the floor tiles, and then go on to make the determination that this is symptomatic of a water leak?

I think our guys would have missed it. They don't walk around in bare feet or use any other floor temperature detection devices.

I'm just not understanding . . . . but maybe it's a California thing?

Yeah, there really wasn't any indication of any leaks and i'm not sure if a home inspector would have found that... the only way to tell was if a person walked on the tiles barefooted when hot water is used and home inspectors don't do that... tiles don't get wet... I guess another symptom indicating the leak would have been her high electric bill(3x what norms would be)... this was an electric water heater... I guess it is best to heed everyone's advice and not contribute anything to the repairs. you guys are right... just too much liability... buyer was advised to get a home inspection and declined... her mistake... i wonder if the home inspectors could be held liable for something like this if they didn't find it during an inspection..

Then that doesn't really sound like a water "leak" at all, does it?

Where's the leaking water being diverted to?

As an aside, I once listed a so-called Double-Wide where they screwed up in assembling the two halves, and swapped hot and cold water pipes on one side.

If you paid attention when you did a cold water wash, you'd get very hot water instead. But my people didn't pay attention to very much.

Now, over there at the commode, un-tempered hot water was fed directly into the toilet tank. Only if you flushed while sitting there for an extended stay would you have realized that your rear end was being steam cleaned.

The Owners' electric bills were extremely high (but aren't everyone's?) and they weren't the heavy duty thinking types; so ultimately, that hot water in the toilet tank melted the plastic valves and gaskets, et cetera, and then the toilet started running continuously and steaming up that whole end of the dwelling. Now that finally got the Owners' attention . . . . a real "hot seat" !

A Plumber was called and had to ask if they really wanted hot water to be used for flushing? He'd never seen anything like it !

You might have a false alarm in Sacramento. Sounds a little goofy. Tell them to do more investigation before authorizing the expenditure of any money.

Something is not quite right here...the tiles are hot from a hot water leak but no water is coming through the tiles?

In my "previous life" I was in construction and installed thousands of feet of hot water radiant floor heat in concrete floors and every time we had a leak (even a very minor one) it came right to the surface....it would take one heck of a leak to make the tiles hot.

If you have a water meter you can turn off all water use in the house and watch the meter for an hour and see if it moves.

916;
This can become a bottomless pit for you. Regardless of the reason you elect to pay for 1/2 the repairs, any high speed attorney will twist it into an admission of responsibility. What happens if the repair is 15K? You did admit you felt responsible. Not a verbal admission, but a check written. Next month they find termites, a leaking roof or whatever. Could the aforesaid high speed attorney make his case? Maybe yes, maybe no. The type of questions they'll hit you with are "how many times did you suggest the home inspection"?"If you felt a HI was that important, why didn't you insist, or offer to pay for it"? "YOU did claim they were a valuable client, sent you referals, gave you a Christmas present, yet you balked at 300"? A sharp, even a dull attorney may well cast enough doubt to get some monetary consideration. Also, they're the inexperienced and poor home buyer. You're the well trained and wealthy realtor. All these darn courts know is half each if your right and punitive damages if you're wrong. Plus thoudsands in attorney fees for you.
If you want to keep them happy, don't offer until they ask and then tell them your corporate council won't allow it. Bummer, you don't want your broker to fire you.
The short version...no way. It wasn't your stupidity that caused this.
Just another observation here. A diagnosis of a leaking hot water line and an estimate of $3,000 based on a warm floor is the most Mickey Mouse trouble shooting I've ever seen. In New England they used to build slabs with the water and heat lines in the slab. When a pipe developes a leak there's water all over the floor and no way of determining which room the leaking pipe is. The water travels along the pipes until it reaches a crack. Mickey flippin Mouse.

Oh, I have a headache from this one! I always have my buyers sign the FHA For Your Protection, Get A Home Inspection form whether they have a home inspection or not. It shows proof that we discussed one; plus, alot of REO sellers are requiring it even if it's stated in plain English on the contract that the buyers are having a home inspection.

Own personal experience last year: Mother-in-law's water bill was fairly high, $74 whereas she checked with her neighbors who have the same number of bodies in household and theirs were $28 (two different neighbors). We shut off the MAIN shut off valve inside the house, then opened the water meter in the ground, waited a few minutes, and observed the needle was still moving. Ugh! Had a guy from a few counties over come down with a listenening device. This guy actually pinpointed the leak to within one inch! Her house had that "Blue" piping (Google it) that was recalled a number of years ago, but you had to file an application for replacement within a certain period of time and of course M-i-L did not know she had that piping (couldn't see it because it was covered under the concrete floor in basement as it was used just for the main water pipe). Perhaps you can find one of these guys online (like I did). His company is Line Locators in Virginia if you'd like to see his website.

One plumber wanted to do the same - route piping overhead (easier for them, but which meant ripping out drywall and reinstalling, plus the ceiling would end up lower in the hallway). M-i-L didn't like that. At least with the concrete being torn up (another plumber made repairs, not replacement), it was easier to fix, and, I figure if it leaks again, at least only the lower half of the basement may get wet versus leaking from the ceiling into the walls and then the carpet. Ugh!

If it's a concrete slab, there is probably no way a regular home inspector could have found it. Even then, they are usually only obligated up to the cost of the inspection itself - they make buyers sign that acknowledgement.

Your buyers SHOULD have purchased a home warranty - next time offer it to your buyers as your "gift" at settlement. Why didn't you suggest it as part of seller concessions? Most sellers will gladly pay for one. At least you'll feel a little better when a repair is needed that they don't have to shell out as much cash with a home warranty.

Repairs are part of homeownership - sad, but true and I tell my buyers that.

And I wholly agree with everyone who has responded - helping to pay for repairs can be construed as if you were in some way responsible.

A referral is one thing; an actual sold transaction is another.

Good luck to you!

Just from personal experience - I bought a house 18 years ago in Jacksonville, had a home inspection and a home warranty.
About a year later, we had a "slab leak" under the dining room floor and we knew it because it ran into the garage and the living room that was about 5 inches or so lower than the dining room.
They ended up having to jackhammer the floor and found the leak at a T fitting where the water line branched to the kitchen and the water heater which was in the garage.

The plumber who did the work said it was fairly common in the Jax area because when the houses were built the piping was copper but the fittings were an alloy. The hole in the fitting was just slightly larger than a pin hole.

I never blamed the sellers or tried to get recovery from our real estate agent. Sometimes things just happen. Think about it, you buy a car and a month later the battery dies. Is it the fealer's fault or the car salesman fault? Would you go back to try to get a new battery from them?

Too late now; but couldn't they have come up with a more attractive name for that kind of foundation than . . . . "The Slab" ?

I know, I know . . . . there's the "Floating Slab" and we have the "Insulated Slab" to dress it up a little bit.

We sometimes have frost get into the ground and lift the slab, kind of crooked-like, and then it's called "A Heaving Slab" or sadly, a "Busted-Up Slab" which you have to be careful with in communicating to the more delicate minds among us.

Hey, how about a Slab of Spam with that Lettuce and Tomato ?

But I digress.

Interesting to read how you act of generosity can set you up for a slippery slop of trouble.

I agree with the others you earned your money keep it. The only thing you should offer is some advice to get a 2nd opinion based upon what we've learned about plumbing here.