I sold an income property in Waterloo last year. It received multiple offers and sold to a buyer who chose not to get an inspection report (the agreement was unconditional). In the six months since closing, the buyer has had to pay for a new furnace, fix the wood-burning fireplace as required by their insurance company, replace the ensuite jacuzzi tub and buy a new stove. They say there might also be an underground oil tank, though my inspection report from when I bought the home over a decade ago makes no mention of this. Our purchase agreement stated that all chattels would be in good working order. The items mentioned were old, but all were working on the date of sale. The buyers are now demanding $40,000 from me, or are threatening to sue. This feels like a case of buyer’s remorse. How would you advise me to proceed? – UNCONDITIONAL SALE
DEAR UNCONDITIONAL: I wouldn’t be writing a $40,000 cheque just yet.
I’m going to answer this question generally, since I haven’t seen your purchase agreement. You’ve given me a few iron-clad things to work with, such as the fact that the house was sold with no conditions. Clause 13 in the pre-printed portion of the Ontario Real Estate Association (OREA) Agreement of Purchase and Sale goes as far as pointing out that the buyer has the opportunity to include a home inspection in the agreement, and in this case has chosen not to do so.
The media has been painting a rather gloomy picture of the real estate market in the last year or so, but don’t let that fool you: many properties are still receiving multiple offers. My interpretation is that the buyers were in competition and made a decision to write a firm offer based on the information they had. You’ve said the chattels were old, but if they were working as expected on the day of closing and that’s what the agreement required, your obligation to the buyer has been met.
It’s not the seller’s role to have a crystal ball and look into the future. Chattels have an economic lifespan, and like many things, they often work well…until they don’t. I think it’s fair to assume your buyer is feeling some remorse. Declining property values are getting lots of media attention, and the failure of several older chattels is rubbing salt in the wound.
Concerning the possible underground oil tank: unless you were aware of it, it’s up to the buyer’s due diligence. Call your agent, and I suggest the buyer call theirs. Review the offer, and if a legal opinion is necessary, make a quick call to the lawyer who handled your transaction.
PRO TIP: Six months is a long time. Old things break. Everyone is entitled to sue, but I suggest both sides seek professional legal advice first. Threats are easy to make, but following through is something else entirely. If you sue somebody and lose, you could be paying some or all of their legal bills on top of your home repairs. #Advice #AskDavid #TheNegotiator
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