- The Washington Times - Friday, September 27, 2002

Q: We sold our home a few weeks ago, and are now doing a rent-back for a couple of months until our

new home will be ready. Our Realtor had us sign a "standard" post-settlement occupancy agreement, which I think as the seller and now renter has really hurt us.

It states that "all electrical, heating, air conditioning, plumbing and any other mechanical systems and related equipment appliances and smoke detectors included in this contract shall be in working condition."

Since the date of settlement, the garage door opener broke and the water heater developed a slow water leak. We bought a brand new garage door opener and had it installed and have gone to Home Depot to have a new water heater installed, which now requires a new flue, at a cost of $250, and new doors for proper ventilation as well as installation and permits. Very expensive.

Based on your interpretation of this language, are we responsible for all of those costs? Is this really "standard" language for this area as my Realtor has told us? T. James, Washington

A: When it comes to interpreting contracts and legal agreements, please consult with an lawyer. But when it comes to real estate agreements, the contract says what the contract says or in this case, the post-settlement occupancy agreement says what it says.

Before you sign anything, read it. I know that sounds pretty basic, but read it and then go over it with your Realtor or attorney. When the form says, "all electrical, heating, air conditioning, plumbing and any other mechanical systems," are to be in working order the day the buyer walks in as the new owner, you can pretty much count on the buyer expecting all that to be working on move-in day.

Rest assured, the buyer or his attorney/Realtor will enforce it to the extent the law allows.

When you look at signing this type agreement, conduct a mental inventory if not actually written down of the condition of your house. How's the plumbing? Now before you answer, "Oh, it's fine," remember that plumbing includes the commode, the faucets, the traps, etc. If you have to jiggle the handle on the tank for the water to quit filling the toilet, that is not working. It needs to be fixed.

If those items are working now, what about appliances on their last legs? In your case, that would be the garage door opener. If you've been having service problems on an air conditioner, refrigerator or ceiling fan, you may want to write an exclusion for those items and insist onan "as is" phrase in the occupancy agreement.

Keep in mind, though, not many buyers will go for that unless they find themselves in a horrific seller's market where houses with defects are scurried after as much as those that are in pristine condition.

You essentially are no longer the owner of your property, but the intent of your staying there is not for an investment, such as a landlord-tenant situation. In such a case, the investor-owner would expect to absorb the costs of the new water heater and garage door opener. The new owner, however, is doing a rent back to help you with the timing of your move. He or she wants to enter a home that is in move-in condition.

On the other hand, imagine what they would be saying at this point if they had moved in right after settlement and all these appliances started breaking down. You might have found yourself in small claims court.

I would guess you would want the same liability requirement if the tables were turned. In the future, consider a home warranty, which usually would cover the items you have mentioned.

Most homeowners are under the assumption that home warranties are only for those in the midst of a home-buying/selling situation. Actually, most home warranties can be bought at any time you own the property.

The basic requirement is that your house is in good shapeand that all the itemscovered by the warranty arein working order.

Warranties carry a deductible for each incident and the policies require you to call the warranty company first before making arrangements to have the system or appliance fixed. For information on home warranties, visit one of these sites:

2-10 Home Buyers Warranty: (www.2-10.com).

American Home Shield: (www.ahswarranty.com).

Best Home Warranty Company: (www.bhwc.com).

Fidelity National Home Warranty: (www.homewarranty.com).

HMS Warranty: (www.hmsnet.com).

Home Warranty of America: (www.hwahomewarranty.com).

M. Anthony Carr has written about real estate for more than 12 years. Reach him by e-mail ([email protected]).

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