By Mark Weisleder
What condition do the appliances have to be in on closing? What if the fridge breaks down one week after closing? What if the furnace stops working? Whose responsibility does it become?
In most agreements, the buyers typically request that the chattels and fixtures, including all heating, air conditioning and plumbing systems, will be "in good working order" on closing. This means that all chattels and systems will be working when the buyer takes possession of the property. This doesn't mean that the seller warrants that everything will be working one month after closing.
Sometimes buyers can't check all the chattels and fixtures on the actual date of closing. A clause has been developed to deal with this:
"The seller represents and warrants that all chattels, the furnace and the heating, plumbing and air conditioning systems will be in good working order on closing. This warranty shall survive closing but only to the extent that the said chattels, fixtures and systems are in good working order on closing."
What this clause means is that if there is not enough time on the day you move in to check all the appliances and systems in your home – and you find out when you try them a day or two later that they are not working – then you can still ask the seller to repair them, as they were likely also not working on the day of closing.
When we say that a warranty survives closing for a month, it is like a warranty that you receive when you buy an electronic item like an iPod.
It means that if something breaks down during this one-month period, the seller is responsible to repair it.
Sellers do not like to give these kinds of warranties on anything in the house after they move out because there is always the problem of determining whose fault it was that the item broke down.
That is why for the most part, sellers only give a warranty that everything will be working on the day that you move in, and no longer.
Sometimes, however, it is not possible to check whether an item is working, even a few days after you move in.
An example might be the condition of the swimming pool when the property is purchased in February and there is no way for a buyer to check to see whether the pool is in good operating condition.
One way to deal with this problem would be for the seller to give a warranty about the condition of the pool that will extend until May 1, when the pool is normally opened for the season.
If sellers are reluctant to provide this, an alternative would be to ask the sellers to provide the pool closing report typically completed by the maintenance company that looks after the pool, which should indicate the condition of the pool at the time it was closed for the season.
Sellers, if you know that some of your appliances or systems are not working when a buyer submits an offer to buy the property, disclose this immediately. If an appliance breaks down after the agreement has been signed but before closing, the seller has to conduct the repairs.
For buyers, you may be able to purchase after sale warranty protection for major appliances and home systems after closing, to give you peace of mind that you will not encounter unexpected repair bills during your first year of ownership.
Mark Weisleder is a Toronto real estate lawyer. Contact him at firstname.lastname@example.org