Buyer Possession Before Closing and Repair Obligations

QUESTION: My seller needed to delay closing, so the parties agreed to have the buyers take possession prior to closing in exchange for moving the closing date out two weeks. After speaking with an attorney, my client decided to use the Buyer Possession before Closing Agreement (Form 2A7-T) to memorialize the deal. Now that the buyers are in the home, I was informed that the heat is out and the buyers are requesting my seller pay to fix the heating unit. Who is obligated to make this repair?

ANSWER: Paragraph 3 of Form 2A7-T imposes on the buyer the obligation to maintain the property once they take possession. Paragraph 2 of the form states that the buyer waives any remaining due diligence rights and agrees to accept the property as it stands when they take possession. However, there is one important exception: “Seller shall not be obligated to maintain the Property after the Commencement Date, subject to any obligation that may be imposed on Seller by law.” (emphasis added).

Paragraph 3 of the Guidelines for Completing Buyer Possession before Closing Agreement (Form 2A7G) notes, “Though Buyer has a duty to maintain the Property, certain maintenance will remain the duty of the Seller by law (NCGS Chapter 42), such as making sure the Property is fit and habitable and providing operable smoke alarms.” N.C.G.S. § 42-42(a)(4) requires a landlord to “Maintain in good and safe working order and promptly repair all electrical, plumbing, sanitary, heating, ventilating, air conditioning, and other facilities and appliances supplied or required to be supplied by the landlord provided that notification of needed repairs is made to the landlord in writing by the tenant, except in emergency situations.”

Therefore, a seller will be responsible for the cost of repairing the heating system in the property since it is included within the list of obligations to provide fit premises. Furthermore, the statute prohibits the landlord and tenant from waiving the landlord’s legal obligations to maintain the premises, which is why this exception is included in our standard form. A seller should consider this obligation to maintain the premises when setting the rental rate for the buyers.

Release Date: 1/11/2024

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