Home defects can pit sellers and buyers

STARTING OUT

April 03, 1994|By Dian Hymer

What defects should I expect the seller to fix?

Few houses, even new ones, are free of defects. Disputes between buyers and sellers can arise over who's responsible for fixing defects. The answer isn't always clear.

Defects fall into two categories: Those discovered before closing and those discovered after closing.

The first thing to do if you find a defect is to review your purchase contract. Many contracts include a "seller warranty" clause, which states that the house systems (such as plumbing, electrical, heating, cooling) will be operable at closing and the roof will be free of leaks. If such a clause is included in your contract and the water heater breaks before closing, the seller is probably responsible for the repairs.

Another clause that's frequently a part of the purchase contract is a one that states that the seller will maintain the property in its present condition until closing. Such a clause would also indicate that the sellers would be responsible for taking care of property problems that developed between the time the contract was entered into and the closing.

Most purchase agreements include an inspection contingency, which allows the buyers to inspect the property. Who pays to repair defects discovered during the inspections is often negotiable. Frequently, buyers and sellers agree to share the cost to repair defects.

Sellers can't be expected to remodel or upgrade their house to the buyer's specifications. The defects that sellers are often receptive to repairing are ones that pose a health or safety threat.

Inspections may reveal that systems aren't defective but that they are at the end of their useful life. It may be unreasonable to expect a seller to pay the entire cost of a new system (such as a furnace) if the current one is still working and it's just old. If the system is truly decrepit, the buyer may be able to negotiate a credit from the seller, or a price reduction, to help pay for a new system at some time in the future.

Defects that surface after closing can be problematic. Again, the purchase contract may indicate who's responsible. For instance, the roof was to be watertight at closing and it leaked during the first rain, the sellers may be responsible for fixing it. On the other hand, if the buyers were aware of the leaky roof and agreed in writing to purchase the house with the roof in its "as is" condition, the buyers would be responsible for repairs.

FIRST-TIME TIP: If a defect is discovered before closing, an attempt should be made to create a written agreement that specifies who will be responsible for repairing it. Ambiguity can lead to trouble. It's almost always easier to resolve defect problems before closing than it is after closing.

THE CLOSING: If you do find yourself in a situation where a defect surfaces after closing, your first course of action should be to try to resolve it directly with the seller. If the seller is unwilling to help resolve the problem, discuss the problem with the real estate brokers involved. If this doesn't bring satisfaction, talk to a knowledgeable real estate attorney or take the issue up in small claims court if it's a relatively minor problem. Lawsuits cost money, so this should be a last resort.

Dian Hymer's column is syndicated through Inman News Features. Send questions and comments care of Inman News Features, 5335 College Avenue, No. 25, Oakland, Calif., 94618.

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