Recently, I conducted a residential closing on a property in a\u00a0high end suburb of Boston, The property was generally in great condition, but my client, the BUYER,\u00a0informed me\u00a0that the pre-closing inspection (not the inspection after the Offer, but the “walk-through”) indicated that the air conditioning system in the home didn’t feed both floors. The SELLER said he was mistaken, and there was no problem with the air conditioning system, at all.<\/p>\n
An impasse arose where the closing, itself, was in jeopardy. The problem was that this is a “grey” area in most sales agreements. It is not a material kind of breach of the covenant that the property will be in the same condition that it was at the time of the signing of the sales agreement. On the other hand, the BUYER expected a fully operational air conditioning system.<\/p>\n
After some rather heated discussion between counsel, a compromise position was reached, whereby a sum of money was held in escrow pending analysis and repair by an air-conditioning professional. That work was done; the $360 charge paid out of the escrow, and the\u00a0 both parties were generally\u00a0satisfied.<\/p>\n
That was a good thing, because at the worst part of the closing negotiations, my BUYER was not going to close on the transaction, and perhaps leave a healthy deposit on the table, pending litigation, and the SELLER needed the sales proceeds to buy another home in Florida.<\/p>\n
So when it was over, I tried to\u00a0develop some provision I might put in the sales agreement which could prevent this from re-occurring. I came up with the following provision, and I would appreciate feedback from the ActiveRain community (1) whether you think this approach makes sense or (2) what other ways you have seen to deal with this type of problem.<\/p>\n
MY SUGGESTED PROVISION:<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 “If at the “walk-through” the BUYER determines, in good faith, that there is a condition on the premises which is not consistent with the condition which existed when the purchase and sale agreement was executed, but which is not of such material nature which would prevent completing the delivery of the deed and the payment of full consideration for the premises, the BUYER may, nevertheless, complete the transaction, and the BUYER and SELLER will agree on an appropriate escrow sum to be held by BUYER’s attorney, for a period of no longer than thirty (30) days to permit the parties to resolve the problem with the assistance of professionals skilled in the area which is in dispute.”<\/p>\n
Let me know if you think this works, or any other thoughts you may have. Thanks<\/p>\n","protected":false},"excerpt":{"rendered":"
Recently, I conducted a residential closing on a property in a\u00a0high end suburb of Boston, The property was generally in great condition, but my client, the BUYER,\u00a0informed me\u00a0that the pre-closing inspection (not the inspection after the Offer, but the “walk-through”) indicated that the air conditioning system in the home didn’t feed both floors. The SELLER … Continue reading The AirConditoning System Only feeds the second floor–What to do when the pre-closing inspection reveals an issue that complicates closing<\/span>