My client won't accept the property “as is.” He wants to wait until after the inspection to list specific repairs that he wants the seller to fix. Can I leave both boxes in Paragraph 7D of the One to Four Family Residential Contract (Resale) blank, or can I check Paragraph 7D(2) and write in “repairs to be listed following inspections”?
Neither. Leaving both boxes blank in Paragraph 7D or altering the contract terms by adding language in Paragraph 7D(2) that does not list specific repairs could be considered to be acting negligently or incompetently if a complaint were to be filed in connection with the transaction.
The buyer should only choose Paragraph 7D(2) if he knows of specific repairs that he wants the seller to complete at the seller’s expense. Otherwise, the buyer should check Paragraph 7D(1).
Most buyers in this situation will also choose to pay a termination-option fee pursuant to Paragraph 23 in exchange for the right to terminate the contract for any reason within a negotiated number of days. During this termination-option period, an inspection can be performed, and if specific repairs are identified, the parties can negotiate to amend the contract to address these items, or the buyer can terminate the contract.
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10 Comments on "When the Client Won’t Accept the Property As-Is"
You MUST explain the clear English meaning of the promulgated forms, and if it touches the RIghts of the client YOU MUST have them talk to a lawyer! Conveniently, most title companies have lawyers that will be willing to explain Rights, so have the Client pick one to call!
Yet, if the seller refuses to do any found repairs and the buyer has no alternative but to exercise their right to terminate, the buyer is out hundreds of dollars for the right to terminate and inspection cost and that does not protect the consumer.
I was told that there are instances where, if a seller does not make the agreed upon repairs, the courts are sometimes ruling for the seller because the buyer checked they were accepting the property “as is”. That was news to me and is definitely a little scary. I wonder if there is a way we can verify that information.
It would be more helpful in the explanation to clients if the “option period” paragraph 23 (page 8) was adjacent to the “as is” (7 D 1&2 on pg 4). The distance between the two on the contract doesn’t make the most sense.