Federal Pacific Panel Prevents House Closing

[Fordiesel69]

A friend is stuck in a loop on this. Not sure why there was never a forced recall but these panels are unacceptable, and insurance companies make so sense with their rules.

Here is the deal, house was an as-is / where is sale. The house needs nothing major and it is move in ready, and just needs general updates. It was known the electrical panel was outdated. No surprise there, we would change the panel after the closing. What is the surprise is the bank will not close without insurance, and the insurance will not issue a policy, not even a temp policy. Sellers estate will not allow entry or upgrades prior to close, and the existing insurance which is still in place will not write a policy for my friend. So it is ok for them to insure a fire hazard now, but not later?

I just had a major electrical upgrade done at my camp which was very complex, it only cost $2500. It involved tree trimming and removal, complete entry cable re-routing, all new weather head and drop, with new meter box and outdoor main. I thought this was an awsome deal given how hard the job was. My friend is getting estimates of up to $4k which is a joke. Its a simple 200 amp panel with no complications. Everything is accessble and easy to do. House even has the nice romex from the 1980s.

I am unclear how he can continue to the closing. The playing hard ball wont work, the sellers estate people are so arrogant, they just throw the "as is" statement out, and, "All that will happen if you back out is we keep your $5K downpayment, and we will just re-auction the house again".

Anyone run across this before?

 

[dishdude]

This is a well known issue, someone needs to replace the panel, or your friend can pay cash and go without insurance. Your friend should get his hand money back, the deal failed due to the property not passing inspection.

 

[Tdbo]

I'd say the first thing that he needs to do is Lawyer up to see what he can do to minimize the quandary he has painted himself into.
Only thing that I can think of off the top of my head is to ask the insurance company if they will write the house if there is a verified full electric disconnect from the house until the panel can be swapped. If they are willing, this would buy him some time and satisfy the bank, so that he can process the sale and make the necessary repairs.

 

[The Critic]

This is somewhat common and should have been picked up by a savvy buyer and/or home inspector. There are certain home characteristics that make it difficult to buy with a mortgage, this is being one of them. It may just be a tough lesson learned.

 

[Ed_Flecko]

Were there licensed, Real Estate agents involved? What type of contract, if any, was used? Most, real estate specific contracts allow for a variety of contingencies that heavily favor giving the buyer legitimate escape clauses.

Ed

 

[2005jettatdi]

Seller's estate is managed by idiots. That is not all that unusual.

When we built our house in western Washington back in 1984-85 we installed a 300 amp service with a 200 amp and 100 amp FPE panel and circuit breakers. I have never heard of it being an issue, but maybe in the last 14 years someone replaced the panels.

 

[Gyro Gearloose]

I may be looking at the exact same predicament. Old house part of an estate, 1950's/60's electrical. Was livable and being lived in but is a case study in code violations. Trying to sell as is because both my bro and I live hours from the house and have no desire to manage a construction project by remote control. But our motto is tell us how we can work with you.

 

[Jason2007]

When I bought my house in 2020 it still had the FP Stab-Lok breakers. We had no issue closing or getting insurance. Now, I immediately replaced the whole box and funny enough sold the old box and breakers on eBay for about what I paid for the new box and breakers.

 

[JTK]

....My friend is getting estimates of up to $4k which is a joke. Its a simple 200 amp panel with no complications. Everything is accessble and easy to do. House even has the nice romex from the 1980s.

In 2025, I paid ~$4500 to upgrade my 1970's 150A panel to a new 200 in the Buffalo NY area. I went from above ground to underground service which added ~$2K, plus $1500 for a guy to do the excavation. The whole thing was basically forced upon me when a tree limb landed on my above ground service, stretched the cables to bare copper at the weatherhead and bent the mast over. I'm surrounded by trees/woods, so UG was the best option so not to repeat the past.

 

[SC Maintenance]

Were there licensed, Real Estate agents involved? What type of contract, if any, was used? Most, real estate specific contracts allow for a variety of contingencies that heavily favor giving the buyer legitimate escape clauses.

Ed

This ^^

Who wrote the purchase agreement. No real estate "professional" should allow a purchase offer on an as is / where is sale with the buyer requiring financing. Those sales are for people with cash. I think the exception is FHA / HUD - who build this into the offer and help with the financing.

A boilerplate purchase offer should have included this. The home is ineligible to be financed.

No insurance company will write a new policy for a home out of compliance, and no bank will finance without insurance.

Might be able to get a construction loan but that is a whole other ball of wax.

 

[Lubener]

It's also difficult to insure or rent such property which I discovered.. I sold my parent's home "as is" with a federal pacific panel along with knob and tube wiring. .

 

[zzyzzx]

I have those in my house and I think everyone on my street does. No issues. They trip and everything like they are supposed to. No issue with Erie insurance.

 

[nealberke]

I feel your pain. My wife and I sold my in-laws place in Casper, WY. Nothing had been done since it was built in 1957 and the inspector found all sorts of expensive repairs along with nonsense. Casper property prices more or less keep pace with inflation, little more. We were not going to make money for her family so we needed to pick and choose.

Here's an article from an electrican about FPE breakers. There are many more like it. https://www.northbynorthwestservice...al-hazard-a-veteran-electrician-s-perspective

The cost of legal counsel might exceed the cost of replacing the breakers and you will be stuck with BOTH if you fail.

Many houses were underwired for the needs of their time. I don't know how old the property is we are talking about. Typically, if you go into a 1950's home in Southern California, expect to find:

100 AMP or smaller service entrance too small for the needs of 1950's much less today.

Bootleg wiring to wall bangers or central HVAC. Most homes used evaporative coolers or fans in the Summer.

Bootleg dishwasher and disposer installations.

Bootleg dryer installations, ductwork that was never cleaned, Electric pulled from an undersized panel

Ungrounded 110 volt outlets.

No GFCI's outdoors, in kitchen or bathroom.

Badly done garage electric.

And that's just the wiring.

Consider any improvements chargable to the resale of the home. Again, I've sold in a no-growth part of the country and the in-laws needed inheiritance $$$ but if safety is a deal breaker it may be best to just do the work and move on.

 

[dishdude]

Now that I'm thinking about this more, this is 100% on the seller. Deal can't close with that panel, and buyer can't replace the panel until they own it. Seller is an idiot and will need to find a cash buyer if they refuse to replace the panel.

 

[cheetah50]

Those FPE panels are like playing russian roulette with your property. They might work, or they might not. I seem to recall the failure rate on these was in the 30% range if memory serves after U.L. done followup sampling. These and Zinsco panels (The Main CB's were usually fine, it was almost always the flat bus bar for the branch circuits) that were/are very problematic. Back in my time as the Chief EE at an industrial plant we actually had a fire in one of these FPE panels, the branch circuit breaker (Small 20A CB) refused to trip during a small electrical fault in a unmonitored section of the plant. Resulted in ~$60,000 in damages if I recall it correctly, the panel had been slated for replacement due to it being FPE for over 2 years but the budget was never allocated for it.

 

[Jason2007]

I have those in my house and I think everyone on my street does. No issues. They trip and everything like they are supposed to. No issue with Erie insurance.

The issue is way overblown. There are still millions of homes with FP boxes, functioning just fine. As long as there is no rust in the box, you should be fine.

 

[Fordiesel69]

I want to make it more clear, my friend knew the panel was a problem, and WANTS to replace it like yesterday, but cannot until the house closes. The seller did not want to use a real estate agent as they wanted to auction the contents first, (which they did) and then auction the house and property as to no be bothered with any upgrades or maint. It will not pass for an FHA mortguage, and they agreed to do 20% down which completely straps them from any cash. It is overall very outdated 70's / 80's decor but it is in perfect living condition and nothing is out of compliance except this panel.

The current insurance company has the house fully insured, and yet that said company will not write any policy for another buyer. That does not make any sense.

There is a solution we just cannot find one. I suggested he start calling each and every insurance company and just wait till one is either too vague to question it, or maybe doesnt care.

I am questioning why ins companies wont write a policy with a 30 or 45 day grace period to meet compliance or policy is revoked. He asked that too, and just got a firm no!.

 

[JTK]

I am questioning why ins companies wont write a policy with a 30 or 45 day grace period to meet compliance or policy is revoked. He asked that too, and just got a firm no!.

Insurance carriers are squeamish these days. Even us in the N.East are seeing premium increases of 50% in one shot, even with a clean history. They're doing this to your friend because they can do it. I feel for ya. As mentioned above, the only thing your friend can do is back out of the deal. The seller is going to need to find a cash offer.

 

[Cropduster172]

The sellers estate people should grant a temporary waiver/hold harmless agreement to allow an electrician to replace the panel.

We lived in our one home from 1993-2015 with a FPE panel, I even added a 220 v line for a hot tub myself ... never had a problem.
I don't waste money paying home inspectors because 90% are clowns. The home inspector for our buyer did call it out. We refused to replace it and the buyer had no problem. Don't know if she ever had it replaced.

 

[The Critic]

Now that I'm thinking about this more, this is 100% on the seller. Deal can't close with that panel, and buyer can't replace the panel until they own it. Seller is an idiot and will need to find a cash buyer if they refuse to replace the panel.

This. Seller should've found a cash buyer.