Whose responsibility is it to repair and pay for fixtures, heating system, air conditioning system, water heater, furnace, stove that fail soon after a home purchase?
Many times a new homeowner is faced with the frustration of having a fixture such as a built-in stove, water heater, heating system or air conditioning system fail shortly after closing the purchase of the new home and moving into it. The question is, whose responsibility is it to repair and pay for such items that have failed shortly after the home’s purchase has taken place: the seller, the buyer, the home inspector/contractor who inspected the property before close of escrow or a combination of the above?
Purchase Contract
When a fixture breaks in a newly purchased home, the first document for the home buyer to review is the purchase contract, which includes all counter-offers and addendums. These documents typically set forth the obligations of the seller to the buyer and vice versa.
Likewise, most states have seller transfer disclosure statement requirements as well as supplemental transfer disclosure statement requirements to be completed and signed by the seller and given to the buyer before the property closes escrow. The purpose of these documents is to make sure that the seller discloses to the buyer all matters known by the seller about the property, about its conditions that would affect its desirability by a willing buyer, or the amount of money that a willing buyer would pay for the property.
Failure of the seller to disclose all known problems with the home to the buyer is a form of fraud called concealment.
Third Party Inspectors Before The
It is highly recommended that a third party inspector look at the desired property for a buyer before close to ascertain its structural integrity as a whole as well as its individual components such as air conditioning unit, heating system, appliances and the like.
The third party inspectors are home inspectors, pest inspectors, licensed contractors, structural engineers, roofers, and pool service companies. The buyer pays these professionals for their services to inspect the property and to ascertain the existence of any hidden or potential problems with the property. The purpose in hiring these professionals is to safeguard the buyer's interests in purchasing the property so that after the sale concludes, there are hopefully no surprises with the home which warrant repairs. Had the buyer known about such problems, he may not have paid the price they paid or even closed the sale.
When Items in a Newly Purchased Home Fail Soon After Purchase, Responsibility To Repair and Pay For These Items
Perhaps nothing is more frustrating for a buyer of a new home when the built in stove or the home’s heating system develops problems, does not work and a significant cost of repair results. So, who has to do the repairs and most importantly pay for these unexpected repairs?
If the home was a newly constructed home, the developer will be generally responsible for the repairs at his or her own costs. The problem is that the vast majority of homes sold and purchased are not brand new homes-- never having been lived in. Given this, the laws of most all states in this country require that the buyer safeguard his own interests in the purchase against any existing problems with the home that the seller does not know about before the sale is completed and is not disclosed to the seller.
This is completely different from the situation where the seller knows of a defect with the home before the sale happens and does not disclose this to the seller. If the buyer can prove that the seller knew of a known problem with the home that was sold (problems with its heating system, for example) and does not disclose this before close, the seller is responsible for all costs of the repair for the heating system that failed after the home was purchased. The burden in such a scenario can be quite challenging where the new property owner has to prove that a fixture or a system in the home (i.e., the heat or air conditioning) was known by the seller to have problems before close and those problems were not disclosed.
Typically the best way to obtain information about prior undisclosed problems with a home by the seller is for the new owner to speak with neighbors. Many times neighbors will advise new owners of items wrong with the home that they just bought that were not disclosed by the seller.
Proving liability on a third party inspector who viewed the property before close of escrow who ended up missing a problem with the home such as a faulty heating system likewise can be a difficult challenge for the new homeowner. In this situation the new homeowner must retain a new inspector expert to not only look at the fixture or component of the home that failed to ascertain cost of repair, but also to give an opinion as to whether the first inspector should have (in his or her opinion) caught the problem before the home sold.
If the new homeowner cannot get an opinion from the newly retained expert that the prior expert who inspected the home before escrow closed should have caught the problem, the new buyer will have a hard if not nearly impossible task of getting the third party professional who viewed the home before it sold to come up with the costs of the fix.
Home Warranties
As a safeguard for the new buyer, there are many home warranties on the market to help protect the new homeowner from unexpected costs in repairing fixtures and components of a home within six months to a year after the sale is completed. Costs for such warranties run in the range of $250.00 to $500.00. However, many are pretty restrictive as to what they will cover.
Conclusion
Every situation with a new homeowner that unexpectedly faces the costs of repairs for a fixture, heating system, air conditioning system or other component of the home is different with respect to who is ultimately responsible for the costs of the needed repairs. Once escrow closes, the new homeowner is responsible for the needed repairs unless he or she can prove that the former owner knew of problems with the home before the sale and did not disclose them, or that a third party inspector missed a problem with the home that he or she should have discovered with reasonable diligence.