Home buyer: something stinks with this house flipping company

NEWNAN, Ga. - UPDATE: Since this story originally aired, the homeowners say they have settled their lawsuit with Jar House. The terms are confidential, but they say Jar House bought back their home.  

A Hollywood movie stuntman who moved to Georgia finds himself in the middle of a real-life plot twist. Instead of living happily ever after, Matt Thompson and his family live in a house filled with frustration.
 
"Everything back here is bad," the Louisiana native complained as he walked through his Newnan backyard. His anger is focused on the house-flipping company that sold him the property.

"We wanted to move in and have nothing to worry about," he explained. "And that's exactly what we didn't get it."

The company is called Jar House, operated by Zareh Najarian. Each month the Sandy Springs firm buys and sells an average of 75 homes, many of them foreclosures. They list them "as is," meaning it's up to the buyer to hire a home inspector to make sure they know what they're getting.

State law says when a seller knows something's seriously wrong with the house, they can't keep it a secret. And that's where the Thompson's story takes a surprising turn.

Shortly after Thompson and his pregnant wife moved in last year, their toilets started backing up. Turns out they had a broken septic tank system.

They couldn't use their new washing machine. Every few days, they have to drive to a nearby laundromat, instead. To cut down on the frequency of having to pump out the septic tank, they take quick showers. No baths. And they wash dirty dishes in the sink instead of the dishwasher.

Estimated cost to fix the septic system: $60,000. But that's not the only shocker here.

The homeowner who sold the property to Jar House moved just down the street. Thompson found him. According to the lawsuit Thompson has now filed against Najarian Capital, the entity behind Jar House, that previous owner said he warned Jar House about the septic problems. He wrote in a sellers disclosure, "Septic will become slow on several hard rain days but will return to normal after a few days."

Jar House never passed along that warning to Thompson.

"If you had been told there were problems with the septic system, would you have bought this house?" I asked him.

"No." Thompson insisted. "Negative."

In his lawsuit, Thompson says the company failed to follow the law and disclose known defects with the house, calling it "deceit and fraud."
    
They even have an affidavit from that previous owner saying "it is my belief that Mr. Najarian was fully aware of the septic system issues we disclosed as well as discussed at the time of the sale of the home."
    
"The big thing for me is that they knew about it." complained Thompson.

Najarian's company paid $205,000 for the property. He flipped it to the Thompsons for $275,000.

"Hey this is "as is." No disclosures," Najarian countered, explaining his policy to us. "Hire an inspector."

Zarah Najarian told us Jar House's rule is to not disclose any defects because they don't live in the houses they sell. They just flip them. He also suggested Jar House was actually the one who was misled because the seller didn't disclose the true seriousness of a $60,000 septic tank issue, instead saying the system "will return to normal after a few days."

"These are two completely different things," he stressed.

I asked him what would have been the harm of simply passing along to Thompson the previous owner's septic tank disclosure.

"Well, we deal with a ton of properties," Najarian said. "And... at the end of the day you can do so much, right?"

"Is it possible you didn't want to tell him because it would make it harder to sell the property?" I asked.

"No... we're in this business for the long haul and it's not like we're trying to shortchange people any opportunity we have."

The two sides are taking depositions in their legal dispute. Najarian told us he won't buy back the house. For this script, there seems to be no happy ending on the horizon.
 
"Ultimately I want this fixed and dealt with properly and I want people who are doing this not to do this to other people," Thompson insisted.