By Kathleen G. Moriarty, Peters & Moriarty, Attorneys and Counselors of Law
Legal Matters is a regular column intended to address general legal concerns. Since every client walks in the door with a different set of circumstances, you should not rely on this column to provide specific legal advice. If you are in need of specific legal advice, please consult with an attorney; he or she will provide advice that is unique and tailored to your legal needs.
There are two common phrases that show up in many contracts for the sale of real estate that have a habit of coming back to haunt buyers and sellers. With “contract season” ahead of us, it may help to address them now.
The first is the term “as is.” This phrase seems innocent enough, but it’s a broad statement and subject to interpretation. Typically, a seller desires to sell the property without doing any repairs or additional work. Buyer signs the contract not anticipating any major repairs. For instance, the seller may have meant that he would do absolutely nothing to improve the property, but the buyer assumed this only meant the household furnishings she was purchasing with the property. Or the buyer may not have considered the septic and well, which are required by law to meet County Health Department standards before being transferred.
Regardless of who has the legal upper hand, the reality is that most of these issues will be hashed out between the parties and their attorneys because, at the end of the day, seller wants to sell and buyer wants to buy. For this reason, it’s best to clarify what “as is” means by stating in the contract the repairs that will or will not be made, including repairs or replacement of the well or septic system. If the buyer plans to perform a home inspection and the seller has no intention of making any repairs regardless of what the inspection turns up, that too should be stated in the contract.
Buyers often agree to accept an existing survey not necessarily knowing when that survey was prepared or what it might reflect. Since surveys are a physical map of the property, they show encroachments, such as a neighbor’s misplaced fence or a house that crosses a boundary line. If the existing survey is 20 years old, it will not show subsequent encroachments that may affect title. Further, if the existing survey is a copy of a survey, it may not be legible for the purpose of title review or using it for a deed description.
Technically, the seller provided the existing survey, but it’s useless. The question then is who pays for a new survey or whether one is obtained at all. The best way to avoid this question is for the contract to state that the existing survey is accepted as long as it’s a legible, certified copy and was performed within a certain period of time.
Many, but not all, contracts contain an “attorney approval” clause that allows your attorney time to review the contract before it is binding on the parties. Thus, if you are entering into a real estate contract, it is best to contact your attorney ahead of time to discuss specific concerns.