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"All fixtures in good working order" - is that REALLY what you mean?

August 24, 2017

Here is a clause that many realtors include in their offers. I, for one, wish that they wouldn't:

 

"The Seller represents and warrants that the chattels and fixtures included in this Agreement of Purchase and Sale will be in good working order and free from all liens and encumbrances on completion. The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to the state of the property at completion of this transaction."

 

There are obviously a few items that need to be explained here, though for present purposes the second sentence isn't of concern.

 

The distinction between fixtures and chattels is not one that can be simplified into a sentence, but on a very basic level a chattel is something that is not attached and can be easily moved, while a fixture is anything that is affixed to the land or building. 

 

Let's first agree that having chattels in good working order makes perfect sense and inclusion of a warranty to that effect is appropriate. If you are buying a home with a brand new chef's kitchen, it would be frustrating to arrive after closing to discover that none of the appliances work.

 

Fixtures are absolutely everything else, from windows to door hinges to screws and nails. Is a door in "good working order" if it sticks in the summer? Is a window in "good working order" if it has been painted shut? Some lawyers try to get around this by removing the word "good", but I think that falls short and the clause should be refined to reflect what, I imagine, people are actually trying to address, as follows:

 

"The Seller represents and warrants that the chattels and major mechanical systems (meaning the plumbing, electrical, heating and air conditioning systems) included in this Agreement of Purchase and Sale will be in good working order and free from all liens and encumbrances on completion. The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to the state of the property at completion of this transaction."

 

As a buyer’s realtor, you may be correct to think that the first clause written above is preferable because it offers your client more protection, but I would argue that that clause essentially guarantees a client a new home, which is so completely unreasonable that it surely isn’t what anyone thought they were contracting for, and would be much harder to enforce. Using the more plain language immediately above, which addresses the concerns your client more likely has, would not only ensure that the parties know what are were contracting for, it would more likely be enforced were it ever necessary.

 

If you ever require assistance with you contractual interpretation or preparation, please don't hesitate to get in touch with Bryce Murray of our firm.

 

 

 

 

 

 

 

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