Asked and AnsweredWe are purchasing a condo that was occupied by a tenant at the time the contract was executed. We just did the walk through and there is damage to a portion of the floor that was hidden by the tenant’s furniture. Are we entitled to a repair credit at Closing?
Possibly. Whenever an apartment is occupied at the time the contract is executed, it is difficult to determine the actual condition of the apartment because it is usually chock full of the belongings of the tenant or seller. Although the seller’s obligation is to deliver the apartment in “as is” condition on the date of the contract, until the apartment is vacant and broom clean, it is not possible to know if there are any damage issues which were not ascertainable at the time the contract was executed. If a repair issue is minor, I would apply my Twenty Year Rule: “If it costs less than a flat screen, work it out.” On the other hand, if the walk through discloses a more serious defect or required repair that the purchaser was legitimately unable to identify because of the furniture in the apartment, the purchaser should be entitled to an appropriate credit against the purchase price to compensate for the defect or the cost of the repair. If the seller refuses to cooperate, it can turn into a battle of the egos, resulting in an adjourment of closing. In most cases, however, the parties find an economic solution.