Question of the week:
I’m struggling to understand how the 24 hours after the possession day work in terms of identifying any issues.
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I’ve heard about this period, and our realtor mentioned it, but it wasn’t clear how we are covered if any problems with the house arise after we take possession.
Some background: We made an offer, and during the inspection, some issues were found. We renegotiated and agreed with the seller that he would fix them. A new offer was written with all the necessary fixes included, and a date (one week before possession) was set to verify and confirm that everything is fixed.
If everything goes fine and the possession goes through, I was told that I have 24 hours to verify everything again. If anything (not only the agreed-upon fixes) fails, I could inform the lawyer. I’d like to know if this is 100% accurate and understand real scenarios where we could use this provision.
Thank you so much.
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Nick's Response
I’m not sure what province you’re located in, but I am not aware of there being any official/legal “24 hour rule” anywhere regarding a warranty on chattels and fixtures in a home (warranty is not the word you used, but that’s what it amounts to).
It sounds like you’re concerned, understandably, about whether the Seller is going to follow through with promised fixes, and what your recourse would be if they haven’t. I’ll answer you from that perspective, and how to best conduct yourself through the closing:
First off, it’s great that you negotiated the fixes into the Agreement of Purchase and Sale. That means that you have legal recourse to a written contract if these obligations are not fulfilled by the Seller.
Assume that the “24 hour rule” doesn’t exist and is, at best, a custom in your market. Conduct yourself accordingly and take steps so that you don’t have to use the last-ditch tool of taking a Seller to small claims court after the closing. That process is long, drawn-out and expensive with no guarantee that you’ll win.
At your verification visit (probably on the final walk-through a week before closing), document the fixes with photographs and email (cc your Realtor and Lawyer so that there’s date-stamp) along with receipts from the Seller where appropriate.
If the Seller is to provide written proof (receipts) of any contracted work, insist that this be received by the walkthrough date and not the closing date, so that you have time to verify. If that’s not possible, let your lawyer know that you’re concerned that the work is not done and receipts not given, and ask about the possibility of a lawyer’s holdback on closing (basically, the two lawyers agree to hold back some of the closing funds until the fixes are verified).
If you are concerned that any key systems (AC, washer and dryer, etc) won’t be working on closing, run them during your final walkthrough. Although it doesn’t guarantee that they’ll work on closing as well, it’s a pretty good indication that they will.
Is it your lawyer or your Realtor (or some other non-lawyer) who’s told you about this “24 hour rule?” If it’s not a lawyer, assume it’s not true. A Realtor or other layperson should not be quoting law without also recommending that you confirm with your lawyer. We should be staying in our lane.
In my experience I have come across some scenarios where a Buyer has been able to pursue a Seller after the closing, but in the best cases the Buyer’s Realtor has written provisions for these into the Agreement of Purchase and Sale so that the recourse is automatic, and in the worst cases it has resulted in long court cases. Some examples where you might be able to pursue a Seller after closing.:
A Buyer finds issues with a pool that was not closed properly in the fall, resulting to issues during the first summer of the Buyer’s ownership. Since the property was sold in the winter when the pool was not inspect-able, the Buyer was able to have the Seller remedy this. Central AC is another example of this.
A Seller asserts that a basement renovation was done with proper permits and contractors, and the Buyer finds non-code electrical work when opening up a wall for a repair. It would be important that the Seller have asserted this in writing during the sale, otherwise caveat emptor might apply.
Have a healthy amount of skepticism, but be careful not to stray into paranoid territory. Buying a home is stressful and some homebuyers see every action by the Seller as deceitful, but in my experience both parties in a transaction are generally good and not trying to cheat each other. Make sure that you are protected against outcomes that you are concerned about, but unless the Seller has been shown to be shifty or appearing to be hiding any deficiencies during the negotiation, then the most likely outcome is a smooth closing.
Good luck on the closing! Please update us if you take any steps based upon people’s responses here, and let us know how it goes, as I’m sure that many others have the same questions as you.
3 Things to Check at a Final Walkthrough
1
Completed Repairs – If the Seller has agreed in writing to certain repairs, the Final Walkthrough is a perfect time to confirm these in person.
2
The Stove is Hot, the Freezer is Cold – Do at least a cursory check of the appliances if they’re being included with the purchase. This doesn’t have to take long. I like to bring a couple of towels to final walkthroughs to pop in a short cycle in the washer and dryer, and do a short rinse cycle on the dishwasher.
3
No damage from the movers – Scuffs and even small scratches are sometimes unavoidable on moving day, but if the Sellers have moved out before the walkthrough, it’s worthwhile to check that there are no holes in the drywall or light fixtures broken (two of the things that are the most common).
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