We try so hard to make sure our buyer client is protected and that they are getting the home they deserve. However, there are times when we might be a little over zealous.

When inserting a provision into a contract, we have to be real careful. For example: We see in a home being considered by your buyer that it has some early signs of mold. After discussing this with the buyer, we insert the contract that the seller shall, at their cost, remove all mold and repair any damage caused by such mold. Now that is pretty simple, to the point and very clear to all parties. Another example might be with termites. We may insert into the contract that the seller shall treat for termites and repair any damage caused by termites. We might even put a limitation of cost into the insertion.

In both instances, a material issue was identified and dealt with at the seller’s expense. But was this the best thing for the buyer? Probably not! What if the mold was a recurring problem? Likewise, what if there was an adverse history of termites. The provisions above only deal with a short term response to a long term and very expensive problem. But if the text of our agreement as as stated above, the buyer would have to close and the recurring problem is theirs to deal with for as long s they own the home.

When asked to serve as an expert witness on these types of disputes, I see agents that are trying very hard to do the right thing. There are times however that effort may do more harm than good.

Maybe it would make more sense and give more protection to our buyer client if we were to approach these material defects and related problems as a contingency rather than a strict mandate within the contract.

So what is a contingency? It is a provision in a offer or contract that establishes the right of a party in that contract. How would you put this into a contract or offer that you are writing for your buyer client? My wife and I want to buy a home you are showing us on the golf course. I make it very clear that I don’t want to have to buy this house without being able to join that country club. It is not uncommon to see something like this written into the offer: “This offer is contingent on the buyer’s ability to join the PPP Country club. Buyer shall make application within two days of acceptance and remove waive or satisfy this contingency within 15 days of making said application”.

Many would think that would work. As illustrated, the text clear establishes the right of the buyer to apply for and join the country club. But does that text allow the buyer to cancel the offer if they can not join? In my opinion, it does not all ow the buyer to cancel. The only way out is for the buyer to breach the agreement and forfeit their earnest money. Why? Because the text established a right, but not a remedy. Another approach may go something like this: “This offer is contingent on the buyer’s acceptance as a member of PPP Country Club. Should the application to the country club be denied for any reason, this offer shall be considered cancelled and without further consequence to either buyer or seller and all earnest money is to be returned to the buyer immediately.

Going back to the mold or termite issue. In both cases, a contingency that obligated the seller to remove the termite/mold and make repairs is still appropriate. But at the same time, the text probably needs to allow the buyer to cancel the Agreement if it is discovered that there is an adverse history or recurrence of the problem.

All I am trying to do is help you better understand that some issues might be dealt with much better when stated as a contingency rather than a unilateral obligation.