What Does The Seller Warranted

Dated: 07/01/2015

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JANUARY 2014 PAGE 2 SImage titleELLER WARRANTIES IN THE AAR R ESI d E NTIAL R ESALE R EAL E S TATE pURc H ASE cONTRA c T By K. Michelle l i nd, e s q., AAR c h ief e x ecutive Office R Questions have recently arisen regarding the Seller Warranties Section (5a) of the AAR Residential Resale Real Estate Purchase Contract (02/11) (contract). This article will attempt to answer some of the most frequently asked questions about the seller warranties provision in the contract. B A c kg R OUN d The Seller Warranties Section was added to the contract almost 20 years ago and has remained substantially unchanged since that time. In July 1994, the seller warranties provision of the contract stated: “Seller warrants and shall maintain and repair the premises so that at the earlier of possession or close of escrow: (1) the premises shall be in substantially the same condition as on the effective date of this contract, (2) the roof has no known leaks, (3) all heating, cooling, mechanical, plumbing and electrical systems and built-in appliances will be in working condition, and (4) if the premises has a swimming pool and/or spa, the motors, filter systems, and heaters, if so equipped, will be in working condition . . .” The roof warranty was eliminated from the contract in 1996. A requirement that the buyer provide the seller notice of non-working warranted items during the inspection period was added to the contract in 1996. The purpose of this requirement was to allow the seller to evaluate the cost of requested inspection period repairs along with the cost of any necessary warranted item repairs. In 2005, a section was added to the AAR Buyer Inspection Notice and Seller Response (BINSR) form to address the problem of buyers combining the notice of non-working warranted items along with requested repairs of inspection period items disapproved. S E LLER W A RRANTIES S E c TI ON I N THE cURRENT cONTRA c T The Seller Warranties Section of the current contract states: “The seller warrants and is obligated to maintain and repair the premises so that, at the earlier of possession or close of escrow: (i) all heating, cooling, mechanical, plumbing and electrical systems (including swimming pool and/or spa, motors, filter systems, cleaning systems and heaters, if any), free- standing range/oven, and built-in appliances will be in working condition; (ii) all other agreed upon repairs and corrections will be completed pursuant to Section 6j; (iii) the premises, including all additional existing personal property included in the sale, will be in substantially the same condition as on the date of contract acceptance; and (iv) all personal property not included in the sale and all debris will be removed from the premises.” Pursuant to Section 6k of the contract, the buyer is obligated to provide the seller with notice of any non-working warranted item(s) of which the buyer becomes aware during the inspection period or the seller’s warranty for that item(s) will be waived. The contract makes it clear that the buyer’s notice does not affect the seller’s obligation to maintain or repair the warranted item(s). The contract states that: “Delivery of such notice shall not affect the seller’s obligation to maintain or repair the warranted item(s).”

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