Buyer's Inspection Contingency - What can the buyer do?
Q. If an offer to purchase contains an inspection contingency and the inspection reveals a defect, can the buyer terminate the contract or must the buyer allow the seller to repair the defect? What notice must be given to the seller or to the seller’s agent?
A. The terms of the contract dictate what action can be taken when the inspection reveals a defect. Therefore, the terms of the inspection contingency should be carefully reviewed. The language of different forms can vary on what rights and responsibilities are given to the buyer. The contract may give the buyer the right to terminate the contract or it may provide that the seller can repair the defect. Likewise, the form of notice and the timing of notice to the seller should be clearly laid out in the contingency. Inspection contingencies vary and the parties should be aware of its terms prior to entering into the contract.
William G. Mullen III, Esq.
Legal Counsel & Director of Risk Management