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Law Blog

What tips may I give a buyer about aging roofs, appliances, etc.?

Response from Rick Barra, Esq.:

Buyer beware of that old roof…or that creaky a/c unit…or even that rusty refrigerator. Under the typical FAR/BAR contract, as long as everything is in “working order”, the seller has no obligation to make any repairs.

Many buyers assume that the inspection period under the standard FAR/Bar contract provides protection against all problems which may be discovered in an inspection. That false assumption can result in a buyer facing substantial expenses for home improvements shortly after closing. For example, a roof may be at the end of its useful life, but unless it actually leaks before the closing, under the standard contract, the seller has no obligation to make repairs. Similarly, the air conditioner may be on its “last legs” but as long as it pumps out the cold air until the closing, the buyer has no recourse. A buyer may stretch his budget to be able to afford the purchase price, only to be faced with unplanned and unbudgeted expenses which may run into the tens of thousands of dollars.

A buyer may protect against these possibilities in two ways. First, the buyer should request information on the age of the roof, air conditioning unit, appliances and other major items before signing the contract. The possibility of replacing these items should be factored into the offer or specific provision for repair and/or replacement should be made in the contract offer.

Second, the buyer can use the FAR/Bar “As Is” or “Right To Inspect and Right To Cancel” rider. Under either of these riders, the buyer may terminate for any reason during the inspection period if the condition of the property is not “acceptable”. If an inspection shows that the roof, air conditioner, major appliances or any item may need replacing in a short period of time, the buyer could elect to terminate and receive a refund of his deposit.

Under the “As Is” rider, the seller has no obligation to make any repairs. Under the “Right To Inspect and Right To Cancel” rider, the seller still must make repairs for defects under Standards D and N. Accordingly, a buyer would prefer the second rider, but a seller may insist on the first.

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