fbpx

Six most common post-closing issues and how you can avoid them

Six most common post-closing issues and how you can avoid them

There are few things that are more exciting than getting the keys to your new home.  What you typically picture as a happy and exciting moment, can quickly turn into a stressful and frustrating mess thanks to a variety of situations that can transpire after closing.  In “industry-speak” we call these post-closing issues.

As much as we are optimists, we’d like to set the stage with both buyers and sellers.  Something willgo wrong upon closing.  Something willundoubtedly bother you when you close.  Whether it’s garbage that the seller failed to dispose of and left behind, or the dirty toilet in the main floor powder room.  Our best advice is just be prepared, put it all in perspective, and realize that not everyone see things that same that you do.

While there may be thousands of different ‘post closing’ situations, here are the top six we’ve encountered with our buyers or sellers.  The good news is that some of these can be avoided through proactive communications and some due diligence.

Damage to Property

You get your keys and arrive at your new home.  While the place looked spectacular during showings, now that the seller’s furniture and possessions are gone, you notice damage to the drywall.  Maybe you go to the basement and see a big puddle beside the hot water tank.

These things are unfortunately common.   As a typical closing takes 60-90 days from signing the purchase agreement, a lot can change in the condition of a property.  Damages that may not have been visible during showings all of a sudden appear now that the property is vacant.  Sometimes even minor things like removing artwork from the walls can leave nail holes and damages that may require repairs after closing.

post-closing damage

How to handle:

First, you need to know that these types of things are expected, and damages can occur intentionally or unintentionally.   It is important to put things in perspective as to how significant these damages are before you put your time and stress into rectifying them.

When you take possession of a property, make detailed note of any unexpected damages and if possible, take clear photos of the damaged area(s).   Submit the notes and photos to your lawyer and real estate agent.  Please note that submitting these photos doesn’t guarantee that the damages will be rectified, but at the very least, you’d be starting a process where the seller’s lawyer will be notified, and the seller be given the opportunity to respond to your claims.

Surprise!  You’ve got Rented Items

You move in and a month later, you receive a bill to pay for your hot water tank rental.  Problem is, you had no idea it was rented.  You didn’t sign a rental contract or even consider the possibility when you bought the place.  Now you’re stuck with monthly bills you did not plan on having.

It is the job of the seller, and the listing agent, to disclose if there are any items in being sold with the home that are rented such as a hot water tank (or in some cases, air conditioners, furnaces and other appliances).

There is a section within the standard Agreement of Purchase & Sale that specifies which items, if any, are rentals.  Barring the inclusion of a rental item in this section, then all items and equipment are deemed to be free and clear of any encumbrances.

So, what happens when you take possession of your new home, and find out that the hot water tank is rented?  Or the furnace?  Or the air conditioner?

Well, the seller is on the hook for the contract, but will the seller now buy out the contract after the fact? What if they refuse or blame their real estate agent for not including it in the listing and/or the agreement of purchase and sale?

How to handle:

Before you sign an agreement of purchase and sale, ask your real estate agent to verify any rental items with the seller’s agent (who should double-check with their seller).  While there isn’t a sure-fire way to avoid misrepresentation, it never hurts to double check.   If there are rental items, you can request to see those agreements and/or contracts and can require the seller to pay off any contracts prior to the closing date.

During the closing process, your lawyer typically also double-checks with the sellers’ lawyer to see if there are any rental items or contracts, however, the reliance is still on the seller to represent the facts as sometimes rental items may not be registered on title.

If you find out about a rental item that was not disclosed after your closing, reach out to your lawyer immediately.  Your lawyer will likely reach out to the seller’s lawyer and advise of possible next steps.

Appliances not working

You can’t wait to cook your first meal on your new home’s gorgeous stainless-steel stove.  You flip the switch and nothing happens.  The stove won’t even turn on.

Before you get frustrated and opt out for take-out food instead, remember that this happens all the time and could just be a matter of poor timing.  It can also be an appliance that wasn’t in good repair to begin with.

The agreement of purchase and sale will typically include a condition where the seller warrant’s that appliances and home systems will be in good working order upon closing.  This clause can vary in cases where you are buying a property as-is or the seller is aware of an appliance not working or excludes it from the agreement at the time of negotiation. 

How to handle:

Your purchase and sale agreement should include a condition that allows you to revisit the property a certain number of times prior to closing (usually 2-3 times is the norm we see).  We suggest booking the last revisit within a couple of days of closing and using that revisit as an opportunity to briefly inspect the property, including the operations of major appliances. Also, if you had your home inspected, check the inspector’s report for that appliances.

If you notice anything out of the ordinary such as an appliance not working, inform your lawyer as soon as possible.

Another option to protect yourself at closing and after closing is purchasing a home warranty policy.   There are several affordable options on the market that will protect your appliances and home systems in case of breakdown or replacement, giving you peace of mind.

Sellers still on the property after closing

Yes, it happens.  You open the door to your new home only to discover the seller is still in the midst of packing their belongings.  In the meantime, you might have your moving truck outside, charging you by the hour.

Whether an honest mistake or just poor planning by the seller, in these situations, both lawyers must be made aware so that the property gets vacated as soon as possible.

How to handle:

Closings typically happen between 3-5pm in the afternoon.   Once funds have been exchanged and the property’s title is in your name, your lawyer will release the keys.   Sellers are notified to plan to vacate their properties by the afternoon, but things like forgetting to book the elevator or your seller’s moving truck not showing up sometimes do happen. 

If you do find yourself in a situation where the seller has not left the property, keep your cool and try sorting out the situation with them.  They can also be in the same stressful situation that you are in.  While the situation wasn’t what you expected, having a calm and rational discussion may be the best way to deescalate a situation.

The case of the missing chattels

You move in and notice the seller removed all the curtains and curtain rods.  You are in total shock as you were under the impression that the curtains and rods come with your home.

When negotiating your agreement to purchase, it is important to understand the difference between a chattel and a fixture.   A chattel is an item of tangible movable or immovable property except real estate and things (such as buildings) connected with real property.  An example of a chattel is a stove, fridge or a laundry machine.

A fixture in real estate is an item that is fastened or attached to the property like a curtain rod, a light fixture, or even a bathtub (to be extreme). Fixtures are part of the property and should come with it when the buyer takes possession.

There is a section on the agreement of purchase and sale that says “chattels included.”  That’s because all chattels are deemed to be “excluded” unless specifically included.

There is a section on the Agreement that says “fixtures excluded.”  That’s because all fixtures are deemed to be “included” unless specifically excluded.  It is excluded unless it is specifically included in the Agreement.

A curtain rod is a fixture.  It is screwed to the wall.  It is affixed.  It meets the rudimentary test of “nailed, screwed, or glued.  This curtain rod is included unless it is specifically excluded in the Agreement.

How to handle:

Keep in mind that your agreement needs to be as specific as it can and you need to pay special attention to the chattels and fixtures sections before you sign.  If you negotiate for certain chattels to be included, list them out and be specific down to the location (for example: upright freezer in basement, shelving unit on the first floor family room, etc.). 

If you take possession and notice a chattel or fixture missing, consider its importance (it may not be worth the effort or stress to chase down a $20 lighting sconce that was removed) and inform your lawyer as soon as you can.

Garbage and/or junk left on property

post-closing damage

This is the number one complaint we get from buyers by far.  The sellers may have left some of their possessions, garbage or junk inside or outside the property.

As a general rule, the buyer expects the seller to leave the property free and clear of any possessions or garbage.  However, it happens all the time.  Whether it is garbage left on the lawn days ahead of scheduled garbage pickup or the seller leaves some possessions behind.

How to handle:

Consider the severity of the situation and inform your lawyer if necessary.  Your lawyer will work with the seller’s lawyer to potentially rectify.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Leave a Reply