Promises, Promises: “Integration Clauses” . . . in Plain English
“Those train tracks are only active a few times a week.”
“We’ll leave the mounted flat-panel TV in the Amusement Room.”
“Of course we’ll replace the rusty water heater before closing.”
“The sale includes a one-year home warranty.”
Somewhere, someplace, prospective Buyers have heard some version of the above while negotiating their Purchase Agreement . . . only to find
out otherwise just before closing — or after they bought the home (much to their chagrin).
And have little or no recourse.
Why?
All those Seller representations were merely verbal . . . and therefore not part of the deal.
Which is the layman’s definition of what lawyers call an “integration clause” — namely, “if it’s not in the contract . . . it’s not in the contract.”
“Trust But Verify”
The two-part upshot for home Buyers and Sellers (and their agents):
One. You can’t rely on oral representations.
If there’s a material fact relevant for buying the home (for example, how active a nearby railroad track is), the Buyer should independently verify that prior to entering into a Purchase Agreement.
Ditto for Sellers regarding any Buyer representations (see below).
Two. If it’s part of the deal . . . make sure it’s in the deal.
That means explicitly writing in the relevant provision in the body of the Purchase Agreement or in an Addendum.
Even if the Seller represented something on MLS — like a one-year home warranty — the Buyer must still make sure that that provision ends up in the contract.
P.S.: What’s a big — but unenforceable — oral representation Buyers (occasionally) make to Sellers?
“We love your home; we’d never tear it down.”
In fact, all but the most emotionally invested Sellers are usually relieved when their former home is torn down, because it renders any disclosure issues moot.
It’s also the case that builders today are paying top dollar for homes — make that, build-able lots — that meet their criteria.
See also, “Is the Buyer’s Preapproval Letter Part of the Purchase Agreement?“
