Question:
The buyers did a home inspection and were happy with it, so they removed that condition, and closed the deal.
But months later, the buyers found UFFI. They want a lot of money from the sellers. They’re pointing to the UFFI warranty clause in the sales agreement.
The sellers signed that warranty, but only because they truly believed the UFFI was removed professionally a long time ago.
I’m just wondering how a buyer’s home inspection (which they waived) holds up against the seller’s warranty, which survives the closing.
Answer:
The Sellers’ agent obviously didn’t read the clause. It survives closing. And it applies to previously present. It says “ever contained”. It doesn’t make any difference whether it was removed.
However, the “off gases” have come and gone. While the Buyers have a “good claim”, effectively, there are no measurable damages at this point in time. Fortunately, the Sellers can institute a third party claim against their Listing agent.
Here’s the UFFI clause in the standard OREA contract:
“23. UFFI:
Seller represents and warrants to Buyer that
during the time Seller has owned the property,
Seller has not caused any building on the property to be insulated with insulation containing urea formaldehyde, and
that to the best of Seller’s knowledge
no building on the property contains or
has ever contained
insulation that contains urea formaldehyde.
This warranty shall survive and not merge on the completion of this transaction, and if the building is part of a multiple unit building, this warranty shall only apply to that part of the building which is the subject of this transaction.”
Brian Madigan LL.B., Broker