During a real estate sale, the inspection report may identify deficiencies that may be considered significant for the buyer exercising their right to withdraw, but insignificant for the seller.
Writing the offer to purchase a property can sometimes raise issues of interpretation, especially if the prospective buyer includes a clause stating that they can withdraw following an inspection carried out by an expert.
After selling his residence to a third party, for a sum of $90,000.00 less than the price offered by a prospective buyer who had refused to honor their offer, the seller demands compensation of $90,000.00 from said prospective buyer for the incurred loss.
To justify their refusal, the prospective buyer cites two issues highlighted in the inspection report. Firstly, a crack in the underground garage driveway, and secondly, the absence of a section of a fire wall. The prospective buyer exercised their right to refuse even though, at that time, the available information did not justify their withdrawal. The seller argues that the prospective buyer should have provided compelling evidence of a deficiency affecting the residence.
The court concludes that even though the prospective buyer was not justified in withdrawing their offer based on the available information, the evidence presented in court establishes "a factor that is likely and significantly [to] decrease the value of the residence." Therefore, the Court* dismisses the seller's claim since the withdrawal exercised aligns with the wording of the clause regarding the inspection of the residence.
During a property sale, the inspection report can reveal deficiencies that may be considered significant for someone exercising their right to withdraw but insignificant for the seller. Therefore, before putting your property up for sale, why not hire your own inspector and protect yourself from any surprises.
*CA-500-09-021953-112
