Renegotiating Purchase Price after Inspection Found Issues with Boiler and Electric Panels

[Michael Gilman]

I am in contract on a multifamily property that was marketed and priced as a property without deferred maintenance. The inspection discovered some significant deferred maintenance items and some safety issues. While the seller will be repairing some of the deferred maintenance items and taking care of the most of the safety issues we are at loggerheads over how to treat the boiler and electrical panel issues outlined below and any advise would be greatly appreciated (the inspector recommended immediate replacement of both items). 

Boiler Issue - The property uses oil fired water baseboard heating for all units (fuel paid by owner). The boiler was found to be at the end of its useful life, in poor condition and in need of immediate replacement (it is actually a safety hazard in its current state). Replacing the boiler will be about $30,000 and will add fuel savings of 15% as well as reduced maintenance and service costs, The replacement would increases the value of the property by about $60,000 using the income approach (cap rate applied on this property is roughly 9%). The replacement would be done in the summer (presumably when property is my possession) and seller argues he should not be on the hook for the full amount of the repair since I will benefit with a 15% increase in NOI. Any suggestions on an equitable way to apportion the cost of this item in renegotiating with respect to the adjustment of the purchase price?

Electrical Panels -  The inspection uncovered that the electric panels were made by Federal Pacific Electric and have a design defect where the breaker does not timely trip and the thus increase the risk of electrical fire. My understanding is that there are millions of homes with this type of panel and these panels have functioned without issue historically in this multifamily (here is a good video describing the issue - https://www.youtube.com/watch?v=-bFf9dSvqxo) .  The state code does not require these panels be replaced though online literature suggests these panels should be replaced in all circumstances. Electrician quoted a replacement cost of $20,000. Seller argues panels have worked fine without issue so he should not be on the hook for the cost. If this was the only inspection item then it would be easier for to push for the seller to bear the cost but seller has worked with me amicably on some of the other issues outlined in the inspection report (not detailed in this post).  Any thoughts on how to treat this item? I feel like I am obligated to replace these panels form a liability perspective but should I be the one eating the cost? 

 Thank you for taking the time to read this and I look forward to any feedback.