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In Working Order—But When?

Posted April 28th, 2014 under pitfalls, smart buying, smart selling.

Typically, the chattels and fixtures in a home must be in working order on the day of closing. However, there is an important exception to this rule.

A recent case involved a home with a hot tub. The home inspector was unable to test the hot tub because of winter weather, but the seller claimed it was in good repair.

The deal went ahead. As soon as the weather allowed, the buyer tested the hot tub and found it was broken. The buyer sued the seller for damages.

The judge ruled in favour of the buyer. Normally, there is no exception to the rule that chattels and fixtures be tested on the day of closing. However, the judge accepted the weather as an exception, only because the buyer tested the hot tub as soon as possible.

To avoid lawsuits of this kind, it's best to include a separate clause in your agreement to address the condition of the hot tub. This issue can also arise with swimming pools and air conditioning units.

In the case of swimming pools, the typical clause has the seller agree to make the pool fully operational at the start of the next season, bearing all costs. This allows a winter deal to go ahead without any problems.

Want to know more about closing day responsibilities and wrinkles? Just ask me, I'll be happy to help.

--Peter

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