REAL ESTATE AGENT QUESTION*: I have a seller under contract on standard contract and I have always been taught that items for repair on that contract are limited to those mechanically necessary (a/c, roof, pool equipment etc) that the use of a standard contract limits the buyers from being able to ask to have small minor non-functional items to be repaired. How should I proceed with the six items listed below?
ATTORNEY ANSWER*: With respect to the seller’s obligation (subject to the Repair Limits – as defined in the contract) to make repairs under the FR/BAR standard form contact, the applicable provision is Section 12.(b)(ii) of the contract – Property Condition. In this regard, there are three distinctive elements to seller’s repair obligations:
Working Condition – means operating in the manner in which the item was designed to operate – the contract goes on to state items that are to be in Working Condition.
Cosmetic Condition – means aesthetic imperfections that do not affect Working Condition of the item – the contract goes on to state examples of Cosmetic Conditions.
Seller Obligations – regardless of its status as Working Condition or Cosmetic Condition, seller is obligated to repair at or before closing – torn screens (including pool and patio screens), fogged windows, and missing roof tiles or shingles. Also, seller must ensure that the following are free of leaks, water damage or structural damage: ceiling, roof (including fascia and soffits), exterior and interior walls, doors, windows, and foundation.
With this as a backdrop (and the relevant contract language copied below), but subject to the Repair Limits stated in the contract, here are my thoughts on each of the six repair requests:
1. Repair or replace pool water heater; This is a specific item that must be in Working Condition per the contract, so this will be a seller obligation to repair.
2. Repair patched pool screen and ensure all pool screens are secured (loose near top of enclosure); If the screen is not torn, this would not be a seller obligation to repair. If the patch is working – enclosing the screen properly, then the screen is in Working Condition – albeit not pretty.
3. Many stucco and windowsill cracks/chips were noted. Repair is recommended to prevent moisture intrusion; This one is not as clear, as Cosmetic Condition type cracking – those that are not actually causing water intrusion into the residence, are not a seller’s obligation to repair. However, if there is actual water intrusion caused by the cracking – this is probably up to a professional to decide – then it would fall within the requirement that it be “free of leaks” – exterior walls, windows, etc. Since the note reflects that repair is recommended and not required, it makes me think it is not actually causing leaks. You might consider giving in on this one if it gets the deal done and the remedy is small. Alternatively, you could convert it to a cash amount and just have the seller provide a credit and let the buyer handle post-closing.
4. Vegetation should be trimmed away from the pool cage to prevent mechanical damage; This is not a seller repair obligation – if the vegetation existed at the time of contracting and it is not actually causing any current mechanical issues. Depending on its status as of the effective date, I would note that this could fall under the seller’s maintenance obligation provision, as seller is obligated to properly maintain the property prior to closing.
5. Hot water temperature is high at 135 degrees; 120 degrees or lower is recommended to prevent scalding; This is not a seller repair obligation, but assuming this is like all hot water heaters in America, there is a small dial on the front of the hot water heater that can be turned down in 3 seconds to the desired temperature.
6. The air handler air filter needs to be changed; This is not a seller repair obligation, but with $25 and five minutes, the air filter can be changed. The higher end microfilter versions can be more expensive, but I would just get the standard issue from Home Depot. Depending on its condition as of the effective date, I would note that this could fall under the seller’s maintenance obligation provision, as seller is obligated to properly maintain the property prior to closing.
* This is an actual question and answer between a real estate professional and an attorney. Please note that the answer does not represent legal advice. If you need specific advice, please speak with one of the attorneys in the LegalClose network.
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