Two short sentences, one big protection for the buyer – Open permits
A contract ran across my desk a few days ago. A line in the addendum stood out. Having just had an “as-is” contract cancel over unpermitted renovations, I realized this simple sentenced could have saved the buyer(and us) a lot of time . Here is a excerpt from the actual page of the contract:
What do the above barely- legible lines say? “Seller warrants that all open permits will be closed out and that seller will obtain any required permits for improvements to the property prior to closing date.”
To perfect this, we would also add: “This item overrides any contrary language in the as-is rider or language, if applicable.”
In our cancelled file, the seller DID NOT disclose the unpermitted renovations to the unit involving new walls, new electrical and plumbing. Our diligent buyer did some research and tried to force the seller to open/close permits, a hefty undertaking for the seller. The AS IS rider did not require the seller to open or close permits for unpermitted improvements. These material interior renovations could eventually lead to fines and code violations by the municipality, so our buyer backed out. This line would have required Seller to address it and open/close permits and eventually, close – or at least disclose.
Small lines, big impact!
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Legal disclaimer: I am not an attorney and I am not providing legal advice. I am a Certified Public Accountant and am not providing tax advice. Please consult with a licensed Attorney for legal advice or before signing any legal documents. Please consult with a CPA for tax planning and tax advice.
