Accept whatever Deficiencies Show Up

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Question:

I am trying to strike a balance between “good working order no matter what” and keeping a buyer honest who learns about a deficiency during an inspection, keeps quiet but expects it to be in good working order on completion.

Here’s a clause:

“The Seller represents and warrants that all fixtures and chattels included in this Agreement of Purchase and Sale will be those viewed by the Buyer on first viewing and will be in good working order on the completion date save and except for any deficiencies disclosed by the Seller within the terms of this Agreement. Deficiencies identified during a home inspection conducted on behalf of the Buyer shall be deemed to be accepted by the Buyer unless otherwise provided in this Agreement or any Amendment thereto. The parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to the state of the property on completion of this transaction.”

Let’s break up the clause somewhat:

The Seller represents and warrants that

all fixtures and chattels included in this Agreement of Purchase and Sale

will be those viewed by the Buyer on first viewing and

will be in good working order on the completion date

save and except for any deficiencies disclosed by the Seller

within the terms of this Agreement.

Deficiencies identified during a home inspection

conducted on behalf of the Buyer

shall be deemed to be accepted by the Buyer unless otherwise provided in this Agreement or any Amendment thereto.

The parties agree that this representation and warranty shall survive and not merge on completion of this transaction,

but apply only to the state of the property on completion of this transaction.

Comment

I see what you are trying to accomplish, but it seems unfair to a Buyer.

The deal was “good working order” in the APS. Why not just take that out? Now, they are stuck with any deficiencies.

Here, we now have three time periods: first viewing, inspection and completion.

I think I would rather simply say “as is”. And, of course, if you say nothing, then, that’s it: “as is”.

One of the real problems here is appliances and saying that they will be in good working order, when, after all, they are 10 years old, and beyond their life expectancy anyways. They are probably worth only $200.00 at that stage.

I wouldn’t be inclined to use that particular clause.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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