What are the buyer’s options when the seller replaces the front door with a less expensive door?
QUESTION: Some ne’er-do-well broke the front door of the home my client is purchasing a few weeks ago during the Due Diligence Period. The seller agreed to replace the door and signed a Due Diligence Request and Agreement (Form 310-T) to that effect. The listing agent sent me a copy of the receipt and insurance claim shortly thereafter showing that the replacement door was going to be covered and that it cost $3,000.00. At the end of the Due Diligence Period, I went through the home and saw a gorgeous $3,000.00 door leaning against the wall ready to be installed. The listing agent assured me that installation would be finished before closing.
Today, a few hours before closing, I walked through the home again. The $3,000.00 door is gone, a $500.00 door has been installed, and the listing agent is telling me that since no price for the replacement was stated in Form 310-T that the seller had every right to install a cheaper door. What can I do?
ANSWER: First, even though the more expensive door was not specifically mentioned in Form 310-T, we believe the buyer can still claim that the $3,000.00 door was part of the contract. Form 310-T requires the seller to provide the buyer with documentation of any repairs. Since the paperwork you received indicated a $3,000.00 door, that is evidence that the more expensive door was what the parties agreed to.
Second, the buyer can argue that they are entitled to the insurance proceeds that ended up not going toward the replacement door. Under paragraph 12 of the Offer to Purchase and Contract (Form 2-T), the buyer is entitled to the seller’s insurance proceeds if the property is damaged by a casualty. This means the buyer can make a demand for the $2,500.00 the seller appears to be withholding. If the seller refuses to turn over the funds, the buyer can contend that the seller is in breach of contract.
Finally, North Carolina law requires parties to perform every contract in good faith. We believe the buyer in this case may argue that the seller has breached that duty.
We do not know if the buyer would actually be successful on any of these claims or other claims they may have. Just remember that if you cannot negotiate a way for the transaction to go forward, you need to advise the buyer in writing to seek legal counsel so they can be informed of all their rights and remedies. We would also remind brokers that issues like these can be avoided by making sure Form 310-T is filled out clearly. Here, for example, it would have been helpful to indicate that the replacement door be of comparable quality and value.
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