Inspection Contingency: Two ambiguous deficiencies you want to avoid

Wisconsin Residential Offer to Purchase page 9 of 9, Inspection Contingency

Deficiency number 1. NOT TESTING.  Line 410 reads: “This contingency only authorizes inspection, not testing…”. To add clarity, lines 395-409 have the definition of the terms inspect and test.  You can inspect, but you shall not test.   It’s agreed, testing can not be done without a specific contingency and the inspection contingency is specifically not for testing.  Or, is it? At least one firm in Madison has an addendum with an additional contingency altering the inspection contingency to apparently permit testing.

“Addition to Home Inspection Contingency: It is understood that if the buyers’ home inspector recommends that additional inspections/test be completed, Seller agrees to that portion of the inspection being extended for ____days…”.  I put the problematic words in bold.  If I’m interpreting this correctly, if a home inspector recommends a radon, mold, lead paint, water, or air quality test be done, the contingency is extended.  I don’t know if the parties are agreeing to permit the test, or just extend the contingency satisfaction deadline.

Practice Tip:  Do not include any reference to testing under the Inspection Contingency. Use a specific testing contingency with stated acceptable levels.

Deficiency number 2, NOT ENTIRE PREMISES. line 412 to 413: “This Offer is further contingent upon a qualified independent inspector or independent qualified third party performing an inspection of________________________________________________________________________(list any Property component(s) to be separately inspect, e.g., swimming pool, roof, foundation, chimney, etc.)…”. Even with the hint telling us to insert components of the property, some licensees are writing “Entire Premises”.  The consequence of the words “entire premises” in the blank where specific components are to be written may be this:  A qualified independent inspector or independent qualified third party may do the inspection of the property instead of a “Wisconsin registered home inspector” as was first stated on lines 410-411.

When a component (fireplace, roof, foundation…) is inserted in the blank line as intended, the contingency is not ambiguous, and we have an agreement by the parties to allow a buyer to have a Wisconsin registered home inspector inspect the entire property, and a qualified third party or other inspector inspect the component stated, such as “the fireplace, the roof, the swimming pool, the shed, etc.”.

Practice Tip:  When in doubt about what might be written in the blank lines, first look to see if the creators of the form offered any hints or suggestions immediately after the blank lines. I can think of two places where they’ve done so in the Offer. If there is no suggestion, and you feel it necessary to insert something, make sure the words you choose complete a sentence and do not contradict the intent of the contingency.

 

 

Author: Tom Meyer Real Estate Broker, Madison, WI

I believe every every Offer to Purchase can present the unique ability of the person the contract is written for. The person who is most compelled to be cooperative, most qualified, most sincere, most committed, least risk adverse, can have an Offer drafted to show their true ability and commitment. Home sellers are likely to look favorably upon those offers which give them the most comfort. Licensees who know how to craft Offers as unique as the individual buyer are worth their weight in gold.

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