Form-of-the-Week: Property Inspection – Buyer’s Request for Repairs and Final Walk-Through Inspection – Forms 269 and 270

Buyer’s remedies for deceit

A seller and the seller’s broker need to disclose to a prospective buyer all known and observable property conditions and defects which adversely affect the value of the property.

Without a home inspection report (HIR) delivered by the seller or seller’s agent, a buyer’s agent becomes duty bound to request one before submitting an offer. [See RPI Form 130]

The purpose of the home inspection is to have an independent, neutral, third party investigate and prepare an HIR on the physical aspects of the improvements on the property. An HIR from a competent inspector assures a prospective buyer the property is free of defects, except those listed on their inspection report. [See RPI e-book Real Estate Principles Chapter 21]

When a home inspection report reveals property defects unknown and previously undisclosed to the buyer, the buyer may:

• make a demand on the seller to correct or eliminate the defects, and refuse to close escrow until the seller has either complied or agreed to an adjusted price [See RPI Form 269];
• refuse to close escrow for lack of seller compliance with the demand for corrections and enforce the agreement and its price correction provisions by specific performance; or
• close escrow and make a money demand on the seller for the difference between the purchase price set in the purchase agreement and the price as adjusted for the undisclosed defects as called for in the purchase agreement.

A buyer needs to personally re-inspect the property just before close of escrow to confirm:

• the quality of any repairs made by the seller; and
• the general condition and maintenance of the property after entering into the purchase agreement.

The buyer’s right to a final pre-closing inspection of the property is agreed to in the purchase agreement. [See RPI Form 150 §12.4(b)]

On the final inspection of the property, the buyer lists any property defects not already addressed, such as equipment and fixture malfunctions or deferred maintenance. This is documented by the buyer and the buyer’s agent on the final walk-through inspection statement. [See RPI Form 270]

The buyer’s request for repairs contents

A buyer’s agent uses the Property Inspection – Buyer’s Request for Repairs form published by Realty Publications, Inc. (RPI) when their buyer, after entering into a purchase agreement, receives a home inspection report and discovers property defects which need correction. The form is used by the buyer’s agent to document and prepare the buyer’s request for the seller to correct the defects. [See RPI Form 269]

The purchase agreement calls for an initial inspection of the real estate by the buyer, or a representative of the buyer, such as the buyer’s agent. The inspection confirms whether the condition of the real estate is substantially the condition reasonably expected by the buyer. [See RPI Form 150 §12.4(a)]

Expectations are based on observations by the buyer and representatives made by the seller or seller’s agent to the buyer or buyer’s agent prior to acceptance of the purchase agreement.

The purchase agreement further calls for the seller to repair, replace or correct the noticed defects prior to closing the transaction and delivering possession to the buyer. [See RPI Form 150 §12.4(b)]

Blank lines are included in the Buyer’s Request for Repairs for the buyer to list itemized material defects in the condition of the property. The buyer confirms the condition of the property satisfies the buyer’s expectations of its physical condition, besides what is listed on the provided lines.

The listed material defects are both undisclosed and unknown to the buyer prior to acceptance of the purchase agreement. By listing the itemized defects, the buyer makes a demand on the seller to repair, replace or correct the defects prior to closing.

The buyer and seller then sign the form, with the buyer agreeing to the terms stated and the seller acknowledging they received a copy of the form.

The final walk-through inspection contents

A buyer’s agent uses the Final Walk-Through Inspection form published by RPI when the buyer conducts a final walk-through inspection at the time for closing escrow and observes that requested repairs have not been completed. It allows the buyer and the buyer’s agent to demand the seller timely complete the repairs. [See RPI Form 270]

The purpose of the final-walk through is to verify the condition of the real estate at the time of closing is substantially the condition reasonably expected by the buyer based on observations by the buyer and representatives made by the seller or seller’s agent to the buyer or buyer’s agent prior to acceptance of the purchase agreement.

The purchase agreement calls for the buyer to notify the seller on completion of the buyer’s final walk-through inspection of the following:

• any lack of maintenance during the escrow period; or
• any failure of the seller to make repairs and correct defects, which the seller was given notice of after the buyer’s receipt of the Condition of Property Transfer Disclosure Statement (TDS) and Property Inspection – Request for Repairs. [See RPI Forms 304 and 269]

By giving notice of the need for repair or maintenance to the seller, the buyer does not intend to cancel the purchase agreement or avoid the buyer’s obligation to perform on the purchase agreement.

By delivering the notice, the buyer agrees to close escrow as scheduled or as soon thereafter as completion of any repairs and maintenance have been verified by the buyer. [See RPI Form 270 §4.1]

The buyer then makes a demand on the seller to repair, replace or correct conditions which may be listed on the blank spaces provided. Other than the items listed, the buyer confirms the condition of the property on the final walk-through inspection satisfies the buyer’s expectations of its physical condition in both the property’s land and improvements. [See RPI Form 270 §5]

The buyer and seller then sign their names and the dates at the bottom of the form.