One of the more common issues that is brought to our attention for resolution involves repairs. Paragraph 12 of the FAR/BAR Residential Contract for Sale and Purchase sets forth the manner and mechanism by which property is to be inspected, and if necessary, repairs made to the property. Most of us already understand that the Seller is only obligated to make such repairs as are necessary to bring the items into the condition specified in the contract. And the contract sets forth in great detail the manner and mechanism in which repairs are to be made, by whom, and by when.
Recently, we have seen an uptick in questions about the performance of repairs. Some buyers are reluctant to have the seller perform repairs for them, and would prefer to do the repairs themselves. The standard contract does not provide for this. In fact, the standard contract does not provide for any of the following (each of which are common buyer requests):
- The complete replacement of a warranted item. A buyer may want “new,” but the contract standard does not necessarily mean new.
- The use of a specific contractor to do the work. Indeed, the contract permits the seller to make this election, provided the contractor is licensed, if “appropriate” for the work involved.
- An escrow to confirm that repairs were done properly. Once you perform your inspection of the repairs pre-closing, that is it. There is no second bite at the apple unless the seller committed fraud in connection with the repairs and that is discovered post-closing.
- That the repairs be completed well in advance of the closing. The contract merely requires the repairs to be completed on the day before the Closing Date.
When we are asked if the buyer has the right to request some or all of the above, our universal answer is that the standard contract does not provide for it, and therefore they cannot legally make any such requests. So if you suspect that your buyer may want to be a bit more involved in the repair process, these items need to be addressed at the contract stage, not at the repair stage. If you get to the repair stage and you need to make any one of these requests for your buyer, you will need the seller to agree through an addendum to the contract (and they do not necessarily need to do so contractually so this could involve a great deal of schmoozing).
As always, if you have any questions about repairs, we urge you to consult with your real estate attorney.
Berlin Patten Ebling, PLLC
Article Authored by Evan Berlin, Esq. firstname.lastname@example.org
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