Can Seller back our after failed leach field and Buyer not accepting additional addendums?

[399083453]

Originally Posted by Djek

Can they really back out like this?

Yep. Seller doesnt have the money to fix the septic. You can choose to accept the price and go forward and fix the septic yourself. Or back out.

Of course no bank will approve a mortgage with a failed septic so you will need to pay cash.

So its really your choice.

[Valerie C]

The short answer is yes, they CAN back out like this. There is nothing in the standard NH Purchase and Sale Agreement that REQUIRES a Seller to make any repairs to the property. If they are unwilling or unable to make the repair, the Agreement will become null and void, you will have your deposit returned and the house can be returned to market (or taken off the market, repairs made and price changed). The options are clearly spelled in the P&S Agreement in Section 14: INSPECTIONS: (there are 3 options on the P&S to cover inspection items):
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a) SELLER can have the option of repairing or remedying the unsatisfactory condition(s) prior to transfer of title, so long BUYER and SELLER agree on the method of repair or remedy; or

b) If SELLER is unwilling or unable to repair or remedy the unsatisfactory condition(s) or BUYER and SELLER cannot reach agreement with respect to the method or repair or remedy, then this Agreement shall be null and void, and all deposits will be returned to the BUYER in accordance with the procedures required by the New Hampshire Real Estate Practice Act (NH RSA 331-A:13); or

c) BUYER may terminate this Agreement in writing and all deposits will be returned to the BUYER in accordance with the procedures required by the New Hampshire Real Estate Practice Act (NH RSA 331-A:13).

SELLER'S intent to repair or remedy should be delivered to BUYER or BUYER'S Agent within five (5) days of receipt by SELLER of notification of unsatisfactory condition(s). In the absence of inspection mentioned above, BUYER is relying upon BUYER's own opinion as to the condition of the PROPERTY.
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As you can see in the above excerpt, both the Buyer and the Seller have an opportunity to terminate the contract without further negotiations.

First, the Buyer can terminate the Agreement after the Home Inspection, without even entering into negotiations with the Seller (see c) above).

IF the Buyer makes a response/request to repair something (no matter how minor), the Seller can at that point terminate the Agreement (see b) above).

The BIGGEST thing to remember is that TIME IS OF THE ESSENCE in regard to dates on the Purchase and Sale Agreement. It is VITAL to keep to ALL dates, if you are even a day late (in making a home inspection response, or in getting the commitment or loan denial), the Seller can declare a Buyer's contingency as being waived, and your deposit can be at risk.

You mention changing the deed with the septic is redone, and I can't say that I've ever seen a deed with reference to the tank size of the septic system, or even the bedroom count. I wonder if you may be getting that confused with the town assessment. Undersize septic systems for the number of bedrooms in a home is fairly common, but the septic system determines the number of bedrooms that are listed in the assessment data for the town. Typically the 'official' bedroom count can be changed only when there is a new septic system approved and installed.

After 10+ years of being licensed to practice real estate in NH, I am still not comfortable with dual agency. Many agents don't even enter into a Dual Agancy Agrement legally! This is a real pet peeve of mine... If you had not already entered into a Buyer Agency Agreement with this agent BEFORE you walked into her listing, he or she is NOT practicing Dual Agency. He or she is the Seller's Agent and you are an unrepresented Buyer. If you are savy and know how to negotiate and advocate for yourself, you're ok. But the fact that you're here asking questions on a forum tells me that you (like many Buyers) should really have an agent who is looking out for YOU.

Originally Posted by Djek

Seller has accepted our offer and we have a signed Purchase and Sales. The leach field is almost 30 years old and failed the inspection. House is 3br but only now Seller found out the septic tank is for a 2br house. The right thing to do is to replace both septic tank and leach field to comply with today's code for a 3br house but they want us to pay 7K for the leach field to be replaced and us have the deed changed from a 3br to a 2br after we purchase the property. We have less than two days to respond and we are not sure what our rights are. They said that if we don't pay the 7K they'll take the house off the market, do the repairs themselves and list it again for a higher price. Can they really back out like this?

[Djek]

rmcewan, I pm-ed you.

We DO have a dual agency agreement signed. I Am not mistaking the deed with an assessment. This is the first house we will be purchasing so yes, I did have questions. We knew the agent will be mostly working for them but they that's what we had to do. Two agents had dropped us with stupid excuses just because our budget is not big so I guess not everyone is perfect. I am having a hard time finding legal advise for a reasonable fee so if anyone can help it would be highly appreciated.

cowbell76, Of course no one should assume anything. Good thing it worked out for you and the other party too. In our case -
Septic inspection - leach field needs to be replaced. Seller says they'll do it to their cost (10K initial estimate)
Two days later - septic tank also needs to be replaced because it's too small for a 3br house. Seller wants to take property off the market, get a loan and do the repairs whenever they can, (they'll lose their future house too on which they have purchase and sales signed), but we suggested they get a proper quote and get back to us because we are willing to work with them.
Next day - they sent an addendum that we'll pay 7K for repairs and they'll pay for permits and design. In a phone conversation the agent says they'll do the leach field only and buyer (us) needs to change the deed from a 3br to a 2br with an additional room by taking out the closet doors.
Late last night they finally sent the quote and it only says "loam, seed, labor, materials & equipment". To me that is shady. And nwe could not find any information on the contractor online. Quote is 8,5K and they want 7K from us.

[Brave Stranger]

Just walk away.

[RainbowHope]

I would walk on this deal. Let the seller take the hit to bring the system up to passing and they can put it back on the market. By the time this happens, it will be later in the selling season, and they may not get what they were asking for the house anyway. So, you can re-offer and negotiate at that point if you are really stuck on this house.

In the meantime, you need to get out of this dual agent deal, too.

[Djek]

Thank you all for the advice! We counter offered 2.5K or we walk and they took the property off the market. I always think everything happens for a reason.
Lesson learned - never never never use a dual agent! Always have an attorney you can call for consultation (thank God we were able to speak with someone right away)!

[Brave Stranger]

Good for you. Happy you got out of this without harm