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June 21, 2012

8

Mastermind for June 20th. Chattels and Fixtures in Good Working Order and Status Certificate Delivery

by mark mclean

Okay, we had one of our biggest Masterminds of the year today. I’m going to go out on a limb here and say it was everything to do with the great learning and camaraderie that exists at my office and absolutely nothing to do with the fact that it’s beautifully cool inside. Anyway if you missed Mastermind you missed some great discussions on chattels and fixtures in good working order and condominium status certificates.

So, you sold a home and you have included in your offer a clause that says the seller warrants that all fixtures and chattels will be in good working order upon closing. A week before closing your clients go for a visit and decide to pull one of the roller blinds down in the kitchen. The only problem is that it won’t go back up. It seems like it is broken. So being the good agent that you are, you call the listing agent and let them know, as nicely as you can, that the blind is broken and would they please have the seller fix it before closing. The seller responds, through their agent, that you can go jump in the lake. That blind was broken when they bought the home three years ago. Naturally we got into a debate about what “good working order” means. It seems everyone had a different opinion. The blind is meant to keep out the sun, and it certainly does a good job at doing that, even if you have to hand-roll it up every time. So what is the expectation of working order? How do you define “working”? For instance a slow draining sink still technically works but is it in good working order? That depends. So how can you protect your client? Is it fair to walk through the house or condo and video every square inch? Is it your job to make sure every door handle works or are you better off explaining to a buyer that they are buying a “used” home that may have quirks and quarks to it? Someone in the group summed it up nicely with the phrase  “welcome to home ownership”. 

Next up…Status certificates. One of my agents asked what to do about the fact that he ordered a status certificate 10 days ago and he didn’t think it was going to arrive in time. Naturally the first thing that pops into our heads is to extend the condition but did you know that if a management company doesn’t deliver a status certificate in the allotted time it is deemed that, 1. There is no default in the payment of condo fees 2. There has been no increase in condo fees since the existing budget in place at that time and 3. There has been no special assessment since the date of the budget.  So what if it turns out that there IS a problem? The understanding is that the management company would be responsible. Check out section 76(5) of the soon to be outdated Condominium Act. I want to thank David Feld for the quick responses to our questions. You may not know this but most status certificates are available on-line now. Check out Conduit  https://www.statuscertificate.com/ for more details.

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8 Comments Post a comment
  1. Jun 21 2012

    Great mastermind yesterday! And I second the thanks to David Feld – he pretty much rocks our real estate world (as much as a lawyer can, anyway). http://feldkalia.com/

    Reply
    • Jun 21 2012

      Awesome to have a good lawyer at your fingertips. Thanks Brels

      Reply
  2. Jun 22 2012

    Thanks guys – always glad ot help!

    Reply
  3. Sep 13 2012

    Mark this is the most misunderstood clause in an offer. In the case of the blind you are talking about I think this would be attributed to normal wear and tear. If for example, there was a washing machine that functioned but had a slow leak then I think this would not be in good working order and the offer should have said “washer in as is condition.” I think every situation is different bu these 3 words “good working order” are a pain in the neck for buyers and agents. Can you come up with a foolproof clause?

    Reply
    • Sep 17 2012

      CondoChris puts in “reasonable working order”. Do you think that would make a difference or would there just be a debate about what is reasonable? Would it be too much work to have an agent document the age and condition of every chattel in the house?

      Reply
  4. Sep 14 2012

    Good working order is a tough one as its very vague. What it means to one person, may not mean the same thing to another. I find that with appliances and light fixtures it’s relatively straight forward, they either work/turn on or they don’t and if they don’t, I think the seller should be responsible for fixing/repairing it before the closing date. Having said that, it doesn’t mean that they will and believe it has happened to me when I purchased my first property and nothing was done, did I let the deal close…of course….was I going to sue later, not worth the hassle, but not everyone feels the same way. In my opinion if it doesn’t work at all, then the seller should fix it before closing, if it still works, like in the case of the blind in your example, then like one of your agents said, welcome to home ownership. We have old properties everywhere in Toronto and buyers need to understand, like you also mentioned above, that they are buying a used home.

    Reply
  5. Sep 14 2012

    I prefer “reasonable” working order…

    Reply
    • Sep 17 2012

      As I said to Josie, I think reasonable might be a better term but I wonder if people would start arguing about the definition of that too.

      Reply

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