August 9th - 2005

Merv’s column: Whose risk?

The buyers bought a 70-year old house for $650,000 and had a home inspection that noted repairs amounting to $70,000 including major work on the roof.

The buyers bought a 70-year old house for $650,000 and had a home inspection that noted repairs amounting to $70,000 including major work on the roof. The buyers cancelled that agreement. Later they signed an agreement for $625,000: one of the reasons for the price reduction was the costly roof repairs.

 

Between the time of the signing of the agreement and the closing date, a severe thunderstorm ripped off some shingles on the old roof and estimates to repair that damage were a few hundred dollars. The agreement specifically stated that "The property and all included items will be in substantially the same condition at possession date as when viewed by the buyer…." Based on the evidence of the amount of damage to the roof the judge decided that the sellers had met this requirement and did not have to pay for a complete roof repair.

The agreement also had the usual B.C. risk clause that "All building on the property ... will be and remain at the risk of the seller until ... the Completion Date." The Sellers decided not to temporarily patch the roof and a later rainstorm damaged the roof and caused interior damage of some $3,000. The judge found that the Sellers were liable for that subsequent damage.

Brownlee v Dang 2004 BCPC 0038

MERV'S COMMENTS
At common law the buyer was liable for any damage that might have happened after the signing of the offer. That is usually changed by contract as was done in this case. The roof was substantially the same on closing but the interior unit was not. The judge said, "What the sellers ought to have done was to enquire of their roofer or some other roofer what the costs would be to temporarily patch the roof area where the shingles had blown off." Since the buyers were going to repair the roof in any event, I might have asked them if they wanted the roof patched or if they would prefer to have that amount as a credit to the price and have them take the risk of further damage.

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