Question:
Is there a successful clause/holdback arrangement regarding the Seller providing a warranty that the air conditioning unit will be in good working order in the summer? This is for a transaction where the property sells and closes in the winter and it cannot be tested during the inspection due to the weather?
Answer:
You can place a warranty that it will be in good working order on 30 June xxxx, with the survive and not merge provision.
Depending upon the price point, someone might agree to accept that provision, particularly if they advertised that it was “new” or “relatively new” and they are expecting a premium to be paid on account of the air conditioning unit.
In that regard it would be preferrable to have a transferrable warranty from the manufacturer.
However, if it’s close to the 10 year mark, there’s really no chance.
With respect to a holdback, that would leave the file open with both lawyers and run up the costs considerably. So, that question should be posed to the Buyer’s lawyer at the outset.
Unless a holdback is actually specified in the Agreement of Purchase and Sale, there is no option to hold back any amount on closing.
Brian Madigan LL.B., Broker