How Long After Close of Escrow is a Seller Liable for Repairs

February 11, 2016

Westcoe Realtors, Riverside Ca…We live in an age of disclosure.  Most everyone gets that.  There are a variety of disclosure forms a seller must provide for a buyer, but after this is done, and the buyer has approved the disclosure forms and closed the escrow, does the seller have any continuing obligations for any repairs that are discovered later?  In other words, is the seller obligated for any continuing repairs after they no longer own the home?

 

Well, mostly the answer is “NO”, but not always…and here is why.

 

Early in the escrow period, the seller must disclose to the buyer any known defects with the home, or any defects in the past in which the seller has made repairs.  With regards to repairs, you don’t need to disclose when you repaired a leaky faucet with a new washer, but you would be wise to disclose, for example, major roof repairs, or major flooding, etc.  Common sense goes a long way here.

 

Anyway, the buyer will look at your disclosures, and in almost all cases, couple the sellers disclosures with the home inspection the buyer hires a professional to do, and from there, the buyer will ultimately be satisfied with the condition of the home and close…or not and the escrow will fall out.

 

Assuming the buyer closes the escrow, what happens when about 30 days later, there is a big rain, and the roof leaks?  Who pays for the repairs?

 

Well, we are not attorneys, and every situation is different, but here is a general answer to this situation.  If the seller never had any issues with the roof leaking, or had issues but disclosed them to the buyer, then this comes under the heading of “stuff happens”, and the buyer will need to do the repairs.  Yes…it’s possible the roof problem existed when the seller owned the home, but if it hadn’t rained for 9 months, then there would be no way the seller could have known about the leak…hence the buyer inherits the leak.  The thought process here is that the seller is only responsible for what they know, or should have known, and with 9 months of no rain, the seller couldn’t have known the roof now had a problem.

 

HOWEVER…if the buyer hires a roofer, and the roofer says he had given a bid to the old seller about this problem…or there is evidence of roof repairs that were never disclosed to the buyer, or there were buckets in the attic under the leaks, etc…then the seller obviously knew about the leaks at some point, and should have told the buyer.

 

In this case, if the buyer had been for-warned about the past problems, then they could have hired a roofer to inspect these issues, and that may have affected the buyers desire to close the escrow.

 

As another example, pools can work the same way.  Seller doesn’t say disclose anything negative about the pool, and then 30 days later, the pump breaks, or the pool is losing water at a rate far above normal evaporation.  In this case, the seller would still be OK unless in getting bids to solve the problem, the buyer is told by the pool company that the seller had been informed of the issues before they put the home up for sale.  Obviously, the seller knew and failed to disclose.  Hence, the seller has a problem.

 

The bottom line here is that in normal situations, the seller does not have to panic about issues that come up after the close of escrow (assuming it’s not 1 or 2 days after the close) as long as they were forthright with all their disclosures…but if the seller “forgot” to disclose something ( either by accident or deliberately forgot), then the seller has a problem.

 

Our advice to sellers when filling out disclosure forms is this:  When in doubt…disclose.  Stick with this rule, and you’ll be fine.

 

 

 

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