Legal FAQs for REALTORS®
— Contracts and Forms
My buyer’s right to terminate the contract under Paragraph 23 has expired, but his inspector found serious foundation problems and possible mold because of a prior roof leak. Can the buyer can still terminate the contract after the option period because of these issues? (Updated Sept. 23, 2014)
A buyer can’t terminate a contract after the option period has ended just because the inspector found problems. However, under Paragraph 7E, if the buyer’s lender requires that these problems be repaired as a condition of making the loan and the buyer and seller can’t agree on who will pay for the repairs, then the contract will terminate. The buyer will retain the earnest money. In addition, Paragraph 7E provides that if the cost of lender-required repairs exceeds 5% of the sales price, then the buyer may terminate the contract.
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