Consider the following:
“The parties agree that the swimming pool shall be opened not later than xx April, 2022, by a profession pool maintenance company, selected by the Seller, at the Buyer’s expense.
“The Seller represents, warrants, and agrees:
1) That the swimming pool to the best of the Seller’s knowledge and belief, its equipment, and the fencing of the said pool, comply with all applicable bylaws, regulations, and legislation,
2) That the swimming pool and equipment are now, and on a date 60 days following the completion date, shall be, in good working order,
3) To pay for the cost of any repairs required, not covered by insurance in excess of $500.00 which are required to place the swimming pool in good working order.
There are a couple of issues with the swimming pool clause. First this is a pool which adds value to the property, somewhere in the range of $30,000.00 to $50,000.00. It can’t be a “free pool”.
If the Seller is getting extra money, we are going to have to have the Seller accept some responsibility. The first $500.00 is the Buyer’s responsibility. That’s likely ordinary maintenance. We are talking about nickels and dimes. If it’s below that number, then the Seller doesn’t worry.
If there’s damage from an ice storm in the winter, then that’s covered by insurance. So, the Seller doesn’t pay.
The risk of a Buyer damaging his own pool, intentionally, not by accident, meaning the insurance doesn’t cover it, would in my view be slim. The Buyer picks up the first $500.00 and only then “might” collect on the overage. This is not a significant risk. Besides, the Seller has chosen the pool company. This could be a larger risk if the Buyer “chose” his brother-in-law.
This entire arrangement is better than having the Seller’s lawyer holdback $2,000.00, hear that everything is OK; then, release the money to the Seller. Naturally, the Seller’s lawyer sends a $300.00 bill, as does the Buyer’s lawyer. Keep the lawyers out of this; it’s far too expensive.
If the pool is “free” in the deal, then let the Buyer pay whatever. This clause works in some situations. It’s modified substantially by simply upping the deductible.
Brian Madigan LL.B., Broker