Seller Disclosure Looms Larger
The big 2012-2013 change in Minnesota contracts to buy or sell residential real estate — effective Oct. 1 — is the omission of a clause whereby Sellers formerly warranted that the home’s mechanical systems would be in working order as of the date of closing.
The primary reason?
The language effectively served as a “gotcha” in deals where the Buyer knew they were buying a home with defective mechanicals — and discounted the sales price accordingly — then prior to closing cited the clause to require the Seller to make repairs.
Omitting the offending clause is likely to have two, beneficial side effects:
One. Much less reliance on “As Is” Addenda in Purchase Agreements.
If the Purchase Agreement no longer requires home sellers to deliver a home with the mechanical’s in working order . . . there’s no need to undo that language with an “As Is” Addendum.
Two. Commensurately more reliance on the Seller’s Disclosure.
Sellers who want to make sure that Buyers don’t have recourse to pursue them, post-closing, for anything not in working order are well-advised to disclose any known issues to the Buyer beforehand.
Which was actually pretty good advice before, too . . .