Negotiating repairs with an AS IS contract
ORLANDO, Fla. – One of the most popular contracts Florida Realtors has available for members is the Florida Realtors/Florida Bar “AS IS” Residential Contract for Sale and Purchase (“FR/Bar AS IS”). As the name implies, the seller listed the property “as is,” which means the seller has no obligation to make repairs.
However, many Florida Realtors Legal Hotline calls involve a buyer requesting repairs from a seller after the inspection results come in during the inspection period. While nothing prevents parties from renegotiating the terms of an existing contract, it’s important to understand the nuances and risks in doing so in order to facilitate a smooth transaction.
It’s imperative to recognize this: There is no obligation on the seller’s part to make any repairs, nor to even respond to a request for repairs.
As a buyer’s agent, it’s important to communicate this upfront with buyers because you want to have a plan in place if the seller says “no” or simply doesn’t respond. The buyer has a strong right of cancellation during the inspection period, but once that period expires, that’s it. There may be other contingencies within the contract, but the time to cancel for any reason within the buyer’s sole discretion is gone.
In some cases, a buyer hasn’t heard back from the seller, the end of his inspection period is fast approaching, and he isn’t sure what to do. In this case, your buyer must make a decision: Either stay in the deal and potentially take the property “as is” without the requested repairs or cancel before the inspection period ends.
What if a seller agrees to make repairs?
Assuming the seller does agree to a buyer’s repair request, their agreement should be written into the contract under the additional terms or as an addendum to the contract.
While it seems easy enough to jot something down, Realtors should understand the importance of the language used in this repair agreement – and they should also understand the potential liability they’re taking on if they take it upon themselves to draft this addendum.
Is the seller agreeing to fix an electrical problem? Great. But simply stating that the seller will do so is not adequately covering the parties. Far too often, calls to the Legal Hotline involve questions about the way in which the seller completed those agreed-upon repairs. But most of the time, the language used in the repair addendum didn’t address any repair standards or say what would happen if the seller didn’t make the repair at all or did it inadequately by the buyer’s standards.
The Florida Realtors contracts that obligate sellers to make repairs contain additional language regarding repair standards as well as when the repairs should be made. This language isn’t in the FR/Bar AS IS contract.
An addendum that involves many repairs, of varying degrees, likely should be drafted by an attorney to ensure appropriate language is used to protect the buyer and seller.
As stated in articles before, the language in the Florida Realtors contracts varies, and what may be in one isn’t necessarily contained in the other. Recognizing your limitations in assisting your buyer or seller is a good way to avoid running into problems later.
Meredith Caruso is Associate General Counsel for Florida Realtors
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