What happens if a seller entered into contract to sell house that has issues which are prevent the buyer from closing?

UPDATED: Sep 30, 2022

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What happens if a seller entered into contract to sell house that has issues which are prevent the buyer from closing?

The house has an outdated electrical box that is well documented, as well a fire hazard that will prevent an insurer from insuring the house. The seller

knew the issue existed before listing it and refuses to pay for it to be replaced. The inspection was 3 days before closing and the seller is expecting the buyer to pay the fixes. Can the buyer back out and still recoup any of the money spent.

Asked on March 20, 2016 under Real Estate Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

The seller is not required to pay for the replacement of the box unless the contract has an "inspection contingency," the buyer complied with all its requirements (e.g. including timing), and under the terms of that contingency, the seller must make the repair or else the buyer can escape the contract. Without such a contingency, or if the buyer did not comply with its requirements, the buyer has to go through with the sale and the seller does  not have to make the repair/replacement; if the buyer tries to back out, the seller can keep the deposit and possibly sue for other compensation. 

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