Repair Hangover Helper

Have you ever encountered the situation where a seller is unable to meet the maintenance or repair requirements under the FAR/BAR contract prior to closing?

Fear not – the contract provides a clear and concise remedy.

If you have unexpended repair limits, then “sums equal to 125% of the costs to complete the applicable item(s) (but not in excess of applicable [repair] limits) shall be escrowed at closing.”

But what insurance do you have that the seller will cover the difference, should the estimates be too low?  The contract also states that “if actual costs of required repairs…exceed applicable amounts, the seller shall pay such costs (but not in excess of [repair] limits.”

The moral of the story is, do not let an aggressive closing agent tell you they’re giving your seller a “gift” by escrowing the entire cost of the repair/replacement in order to cover undiscovered or undisclosed issues that may come to light as a result of the work yet to be conducted.  The contract is clear on is face as to the parties’ rights and obligations, and should be followed accordingly.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com

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