I made an offer on a park. The seller’s lawyer added this to the contract…
“Maintenance and Repairs: During the term of this agreement Buyers shall be solely
responsible for the maintenance and repair of the premises and agree to maintain the
premises in at least as good a condition as at the commencement of this agreement, normal
wear and tear excepted. The failure of Buyers to maintain the premises in good repair shall
constitute a default under the terms of this agreement.”
I am not comfortable with this. In my opinion, the seller should be responsible for the maintenance and repairs of the premises until closing. What’s more, the seller’s lawyer also added a default clause saying that if I do not cure a default then…
“all sums previously paid by Buyers under the terms of this agreement as well as any repairs or improvements made by Buyers shall be considered as rent and liquidated damages and shall be retained by Sellers and not recoverable by the Buyers.”
So if I do not cure a “default” then I will lose my earnest money deposit.
I am not comfortable with these additions to the contract. Would you sign a contract with this verbiage? Thanks.
“I made an offer on a park. The seller’s lawyer added this to the contract…
Maintenance and Repairs: During the term of this agreement Buyer shall be solely responsible for the maintenance and repair of the premises and agree to maintain the premises…”
I am a Licensed South Carolina Real Estate Broker-In-Charge.
In South Carolina an “Offer” is written on an “Agreement To Buy And Sell Real Estate”.
When both the Seller and the Buyer sign the “Terms” of the “Agreement To Buy And Sell Real Estate”, then the Offer is “Ratified”.
There are lots and lots of “Agreements To Buy And Sell Real Estate” that have been “Ratified”, but never go to Closing (never Sell).
Personally, I would not sign an Offer saying that I am responsible for Maintenance and Repairs of any Real Estate that I just have a Offer on. The Property is still owned by the Seller and the Seller should be responsible for all Maintenance and Repairs until the Closing is completed.
Personally, I also would not sign an Offer saying that the Seller could keep any repairs or improvements made by the Buyer.
An Offer (“Ratified Contract”) just allows a “Potential Buyer” to verify that they desire to go forward with purchasing the Real Estate at the agreed upon Terms.
A “Potential Buyer” should not be responsible for real estate that they do not even own.
On a side note…For my “Potential Buyers” I put lots of “Outs” for them in the “Agreement To Buy And Sell Real Estate”.
The “Agreement To Buy And Sell Real Estate” should be “Contingent” on (These Should Be Written Into The “Agreement”):
“Contingent” On Buyer Receiving Real Estate Loan
“Contingent” On Buyer’s Due Diligence
“Contingent” On Buyer’s Full Satisfaction Of Due Diligence
“Contingent” On MHP Being Zoned MHP
“Contingent” On MHP Being Zoned “X” Number Of Lots
“Contingent” On MHP Being Connected To “X” Water Supply
“Contingent” On MHP Being Connected To “X” Sewer System
If they expect you to maintain the Park then they should also let you collect the rents.
Agree with @Kristin that it’s a ridiculous requirement they way it’s worded today.
You should ask for clarification though - they mention maintenance beyond normal wear and tear. Typically there is a clause that if Buyer “causes damage as a result of negligence or using unqualified contractors” etc then there is liability. The way they have it worded now though nobody would agree.
You should counter offer - the seller must maintain the park after closing
If the seller wants to immediately stop worrying about maintenance, there could be a lease option contract until you finalize the purchase. You’d collect the rents as suggested above.
But to answer your question, no I would not sign that contract (unless it was deal of the century, then I might consider it).
@tmperrault, you are right… this is a seller finance deal, and I asked for clarification. Turns out that the seller did not mean for me pay for maintenance and repairs during due diligence, but only after closing. There were no bad intentions from the seller.
So we changed the wording from…
Maintenance and Repairs: During the term of this agreement Buyers shall be solely
responsible for the maintenance and repair of the premises and agree to maintain the
premises in at least as good a condition as at the commencement of this agreement, normal
wear and tear excepted.
To…
Maintenance and Repairs: Upon closing, Buyers shall be solely
responsible for the maintenance and repair of the premises and agree to maintain the
premises in at least as good a condition as at the commencement of this agreement, normal
wear and tear excepted.
That’s what I thought. My park is seller financed and the seller put similar language in the contract. The seller is making sure that if you fail at running the park, he won’t get run-down park back if he has to take possession.
You might consider taking video or pictures of the park so that you have evidence of the condition of the park upon purchase… that way if there is ever a question about you not meeting the minimum standard (which is subjective), you can compare the actual condition to the pics/video. Add the pics or video as an Exhibit or attachment to the contract.
