Buyer requesting A/C repair day after closing

Buying & Selling Real Estate
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Buyer requesting A/C repair day after closing

Kyle Houlahan
Rental Property Investor · Tampa, FL · Member since 2017 · 36 posts · 12 votes

Timeline of events

  • 2-3 weeks ago: inspection was completed. No issues with A/C unit given in inspection report
  • Day before close: Buyer did a walk through and notified me that the A/C was not blowing cold. I called an A/C technician and he came out and notified me that the refrigerant was low and would need to be topped off in order for the unit to blow cold again. I notified the buyer of this and told them they would need to take care of it themselves as it is classified as regular maintenance.
  • Day of closing: Closed on property. Property sold AS IS
  • Two days after closing on property: Buyer reaches out and states that he had an A/C technician come out and they told him the unit needs a new compressor, refrigerant refilled, and a few other minor things. Total for the repair is $1,700 and he's asking me how I want to go about paying to fix it.

Am I legally obligated to pay for this repair? I had zero knowledge of any issues with the A/C unit other than that it needed refrigerant, which I notified them of. The contract states the property is sold AS IS, and the A/C unit had zero issues at the time of inspection, less than three weeks prior.

1Reply
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Most Popular Reply

Max T.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
8y

You are not on the hook for this cost, but if you're doing a lot of business in the area and care about your reputation I would recommend that you:

1. Get a repair technician that you trust to diagnose the problem again. Their tech may just be trying to create more work for himself.

2. After you get that estimate from your guy, offer to go half-sies with the buyer.

11Reply
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  • Victor N.
    Investor · Wellington, KS · Member since 2016 · 256 posts · 188 votes
    8y
    I think you consult an experienced Florida real estate attorney. Ask: 1)if the buyer accepted the property condition in the closing documents and released you? 2) what is your legal exposure and possible damages as well as your chances of prevailing if you defend the claim? 3) most importantly, what will be the cost to you to defend and win? I think paying half or all of the repair may look cheap after that conversation.
    1Reply
  • Peter Sanchez
    Real Estate Investor · Washington, DC · Member since 2014 · 236 posts · 328 votes
    8y

    Your guy said it needed $600 in freon, which you should've added before the closing to keep it in the same condition it was during the inspection (i.e. an A/C system blowing cold air). 

    His guy says it needs a new compressor at $1700, which may be true or it may be overkill.  

    Why don't you split the difference and offer him $1000 and you can each get on with your life.  He can probably take you to small claims court for $1700, and if he's got a 50/50 chance of winning, and a 100% chance of making you miserable for a few months while the papers fly back and forth. 

    This is your first house sale, but if you want to be in the business long term, then it won't be your last house, so take the emotion out of it and think if your time and energy would be better spent fighting this guy or looking for and working on new deals to make you way more than you'll spend to get this person out of your life.  

    1Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y
    Kyle, you can continue to try to justify this any way you want but the bottom line is: By contract you were required to deliver the house in the Same condition at closing as it was at contract execution, Period. The AC Was working at contract time and was Not working at delivery, Period. BTW, no residential system holds 10 lbs. of Freon. I’ve been an agent, a personal residence happy home buyer and seller, a flipper and rehabber. To be blunt, if I were the buyer’s agent I’d own your a$$.
    5Reply
  • Joshua Allen
    Residential Real Estate Broker · Belvidere, IL · Member since 2016 · 13 posts · 7 votes
    8y

    This is on the Buyer's and seller's agent in reality. They agreed to proceed with no concessions made. Bad move. My soluction: buy them a window unit and offer to pay for the warranty deductible when the time comes. 

    3Reply
  • Justin Fox
    Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
    8y

    It's pretty easy to do the right thing.  Last house I sold the buyer did their final walk-through 3 days before closing, said the stationary window in the back-door double-unit was real foggy and they didn't notice it in the initial walk-through.  I called the local glass place, they said it'd be ~300 bucks, I paid, he ordered and I brought the receipt to closing.  Yes, he replaced it.

    That was door glass.  Imagine what I would have done if they said the AC was blowing hot?

    Basically, your product was defective by the time you picked it up off the shelf and brought it to the counter, and you told the potential buyer that it was their responsibility to fix it even though it malfunctioned before they even purchased said product.

    "I notified the buyer of this and told them they would need to take care of it themselves as it is classified as regular maintenance."  HVAC blowing hot on the cool setting is not regular, or in other words normal.  The unit was "4lbs of refrigerant" or more low.  

    I have a real hard time believing the technician just walked up after investigating and said, 'Welp, it's 4+ lbs. low, which by the way is almost the entire amount of Freon needed for a full charge, but that's normal really.  Oh yeah, It's completely normal to have to do 4 lbs. worth of Freon maintenance on these units.  I can charge it up and it'll be good as new though!"

    0Reply
  • Maugno M.
    Flipper / Landlord · Tyler, TX · Member since 2016 · 255 posts · 126 votes
    8y

    @Kyle Houlahan I am on your side on this. You sold the house "AS-IS" so it shouldnt fall on you. Even the inspection passed so that's on them. You were not misleading, you were not trying to be sneaky. The buyer went ahead and closed so that is on them.

    1Reply
  • Maugno M.
    Flipper / Landlord · Tyler, TX · Member since 2016 · 255 posts · 126 votes
    8y

    @Justin Fox Well if that was the case the buyer shouldn't have closed. You are over complicating this. We are the investors. Our rules. If you don't like it, we'll find another. The buyer's problem now, especially since @Kyle Houlahan let them know before the closing. A/C Units need Freon added all the time.

    0Reply
  • Kyle Houlahan
    OP
    Rental Property Investor · Tampa, FL · Member since 2017 · 36 posts · 12 votes
    8y

    @Justin Fox You continue to assume scenarios. The technician never said it was normal to be that low or that the unit would be "as good as new" with the 4lbs added.

    He said it would need at least 4lbs for the system to blow cold. That's it. No further details. He didn't inspect the compressor or any other part of the unit. He didn't go into details as to why the system needed refrigerant or if the amount of refrigerant that it needed was excessive or not. 

    @Maugno M. my agents broker seems to think the same thing and has notified my agent that if necessary, to refer the buyer and his agent to the broker's attorney.

    I've seemed to have gathered a large variety of opinions from this thread. Just the fact that so many people have so many vastly different opinions means this situation isn't as cut and dry as many of you are making it out to be. 

    I don't think this thread needs any additional input at this point. I appreciate all of your opinions and input on the manner.

    1Reply
  • Eric Weidner
    Lender · Denver, CO · Member since 2018 · 12 posts · 4 votes
    8y

    @kylehoulahan That is definitely a tough situation to be in.  I am leaning on the side of the seller not being responsible.  Not sure if this has been mentioned yet but maybe it is worth getting a third opinion on the repair to see what is really wrong with the A/C unit and take it from there.  

    0Reply
  • Nancy P.
    Naperville, IL · Member since 2018 · 330 posts · 357 votes
    8y

    Always always always love when people ask people to stop posting.  You post, you get responses!  Whether you like them or not.   If you had been absolutely sure you are in the clear you probably wouldn't have posted in the first place.   Yes,  it seems a moral issue which is why you are getting a variety of answers.  However,  maybe you want to listen to the experienced Florida real estate broker who keeps telling you that it needs to be in the same condition as the day the purchase contract was executed.   I hope you find a way to resolve it,  because I agree with those who said if the buyer pursues it,  you will most certainly find yourself wishing you'd paid half of the $1700 repair.   As you go along in this business you will find it's worth some money to build a reputation as a fair dealer,  and that lawsuits costs money and stress and time,  and are worth avoiding.   Good luck to you.

    1Reply
  • Kyle Houlahan
    OP
    Rental Property Investor · Tampa, FL · Member since 2017 · 36 posts · 12 votes
    8y

    @Eric Weidner I agree that the buyer should have another technician come out and evaluate what is necessary for the unit to function properly. 

    @Nancy P. Has nothing to do with "liking" the posts or not. I have received enough opinions to determine that this isn't a cut and dry situation and I don't think additional posts will provide much, if any value. At this point, the posts are just becoming repetitive. 

    0Reply
  • Nancy P.
    Naperville, IL · Member since 2018 · 330 posts · 357 votes
    8y

    Please share what eventually happens,  it will be informative and educational for us all.

    0Reply
  • Justin Fox
    Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
    8y

    @Maugno M.

    Yes they shouldn't have.

    I'm not over complicating anything.  He did the wrong thing and it's strange that I have to keep explaining it.

    It's easy to say that once you've knowingly closed on a defective property and have the money.

    I'm sure your A/C units need Freon 'all the time', but properly maintained ones don't leak 4+ lbs. in 10 months.

    @Kyle Houlahan

    That may be the case.  Why did you skirt your responsibility to provide the property at closing with AC that blew cold, then?  It's $600...  You could have avoided being called out, had a clean sale and the AC probably would have lasted the buyers long enough to clear the 30 day warranty requirement.  Whether there are any legal ramification is irrelevant, you did wrong.

    And you can keep saying you're not in the wrong.  But had the buyers walked and taken their earnest money with them, could you have sold that house with AC that didn't work properly?  Yeah, you would have paid that $600 real quick and prayed it didn't leak before you found another buyer and closed.  Which wouldn't have happened.  You don't 'slow' leak 4 lbs of Freon over 10 months and not notice it.

    1Reply
  • Kyle Houlahan
    OP
    Rental Property Investor · Tampa, FL · Member since 2017 · 36 posts · 12 votes
    8y

    @Nancy P. I certainly will.

    @Justin Fox how would I notice it leaking if the A/C is blowing cold the entire time? What indicates that a unit has a leak if the A/C is working properly and it passed inspection with no issues. I don't understand why you're indicating that I was aware of an issue prior to the technician informing me.

    As I said before, if I were going to repair the A/C unit then i would have requested that the buyer and I renegotiate either the agreed upon sales price or the contribution towards closing. It would have resulted in the same end result either way. I pay for it and he pays more for the property, or he takes care of it and pays less. My agent informed his agent of all the details that we were aware of and she asked if we were going to have the refrigerant added and we said no and they said okay and proceeded to close the next day. By doing this, he assumed responsibility for fixing the A/C unit. 

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    8y
    Originally posted by @Kyle Houlahan:

    Hey Joe,

    I appreciate your input. I understand where you're coming from, but I did not know the A/C needed a compressor or anything else for that matter, until the new owner presented this information to me two days after we closed. The technician that I called to come out simply put the gauges on it and said it was low on refrigerant and that it would need a minimum of 4lbs for it to blow cold. He quoted me $660 for the 4lbs of refrigerant, so not a cheap repair to begin with. I actually didn't even know the unit had a refrigerant leak until I called and asked the A/C company to send me a report of the visit, which I received yesterday (3 days after the tech came out). There's a difference in being unaware of the issue and being deceiving.

    The house was sold AS IS. The A/C was working completely fine two weeks prior and passed the inspection with zero issues. I do not believe the A/C NEEDS the compressor replaced. Is it an older unit and could possibly use a new compressor, sure, but does it absolutely need to be replaced for the unit to work, I don't believe so. It's like saying your vehicle needs a new engine at 100k miles when all it really needs is an oil change and spark plugs. The technician even wrote on their quote that the compressor and refrigerant was a "Band aid" repair and suggested that they purchase a new unit from them.

    The AC system is sealed, so if it is low 4 pounds that means there is a leak. You should never run an AC system when it is that low on refrigerant (AC technician should tell you that). Running the system when it is low on refrigerant will damage the compressor. It is like running an engine low on oil. With all due respect I am not sure you are knowledgeable enough about AC systems to making claims that the compressor doesn't need to be replaced. The system needs to be recharged to test the compressor. Either it works or doesn't.

    The AC failed while you still owned the property, so I think it is your responsibility. The seller should have insisted on you fixing the issue before closing. You would have been forced to do that, because you couldn't sell the property to another buyer without AC. Your "As Is" clause may protect you from legal responsibility, but you have to consider if you want unhappy customers. I would offer to some how split the cost or pay towards the deductible on his home warranty. I would say to the buyer, "I had no idea the problem was that serious and I want you to be happy. As you are aware, I sold the house as is, but what can we work out that is reasonable for both of us?"

    1Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y
    Many posters here are under the false assumption that “as is” means as is at the time of closing... this is totally inaccurate. Any number of things can happen between contracts/inspection and the time it closes. If the roof develops a leak and all the ceilings get destroyed, the buyer has to buy it “as is”? This is why the standard FL realtors As Is contract (used in about 98% of all sales) which was used here specifically states the house must be maintained in the Same condition as the contract date. ‘Nuff said.
    2Reply
  • Jerry Jenkins
    Realtor · North Las Vegas, NV · Member since 2018 · 37 posts · 43 votes
    8y

    WARNING!  Be VERY careful accepting advice on nationwide or worldwide forums like this and here is why.  ALL real estate law is STATE law and it varies greatly from state to state.  What may be legal, ethical, and binding in one state might not be the case in another state.  Your sales contract should have been approved for use in YOUR state to follow your state laws but would not be valid in another state so taking advice from people out of state cares with it risks.

    We have all heard.."Location, Location, Location"   BUT has anyone EVER explained why you say it 3 times?  Here is a short version of my take on this old saying.

    FIRST Location is again state laws.  Some states use attorneys to close while others use Title Companies.  Louisiana has parishes versus counties and sometime follow French law instead of English.  Property tax rates very greatly between states.  Rental eviction laws are another topic most investors miss.  Here in Nevada I can evict for non-payment in 12 days while other states require months; and this will effect your cost to manage the property over time.

    SECOND Location is city or county.  Population going up or down? Jobs going up or down?  Do you have rental restrictions?  Restrictions of rental increases?  Local taxs and regulations.

    THIRD Location is the neighborhood or community the property is located in. Is there an HOA? What are the HOA restrictions, fees, rental restrictions? Does the house back a 4 lane highway or a power line or a T intersection?

    When evaluating ANY property you need to find answers to all 3 location issues to really know how the property will be for the use you have planned for it.  This is by no means a complete list for all 3 location issues but it should get you started at looking at other factors to consider.

    1Reply
  • Kyle Houlahan
    OP
    Rental Property Investor · Tampa, FL · Member since 2017 · 36 posts · 12 votes
    8y

    @Joe Splitrock I would have no issue in paying the owners home warranty deductible as a good faith gesture. However, paying $1,700 for a compressor that still functions properly is another story. I agree that I do not have the knowledge to determine if a compressor is bad or not, which is why I suggested the buyer to get another opinion. 

    0Reply
  • Kyle Houlahan
    OP
    Rental Property Investor · Tampa, FL · Member since 2017 · 36 posts · 12 votes
    8y

    @Jerry Jenkins Thanks Jerry. My agent's broker has advised me to do nothing for the time being and she has informed my agent to have the buyer's agent contact her directly for any further communication on the matter. So for now, I'm just on the sidelines waiting to see how it plays out.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    8y
    Originally posted by @Kyle Houlahan:

    @Joe Splitrock I would have no issue in paying the owners home warranty deductible as a good faith gesture. However, paying $1,700 for a compressor that still functions properly is another story. I agree that I do not have the knowledge to determine if a compressor is bad or not, which is why I suggested the buyer to get another opinion. 

     Make sure they are aware to NOT run the system low on refrigerant or the compressor will be destroyed. That could even be what has happened. Also when making the home warranty claim, they need to tell the warranty company that the problem just happened. If they tell the warranty company it happened before they closed, it will not be covered. When they call, the should say, "it just stopped cooling this morning." Warranty companies love to find ways to deny claims. 

    I hope you understand my point is not to pick on you. Your reputation is honestly worth even more than $1700, but with the warranty there is no reason for you or the new owner to pay it.

    1Reply
  • Kyle Houlahan
    OP
    Rental Property Investor · Tampa, FL · Member since 2017 · 36 posts · 12 votes
    8y

    @Joe Splitrock thanks for the advice Joe. 

    0Reply
  • Caroline Gerardo
    Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    8y

    I assume the buyer will take you to small claims court. They can show any emails or written conversations, inspections, expert opinions. You will probably lose as the court will see you as "investor" and them as the victims.  A property in Florida without airconditioning when you appear in court in August is going to sound god awful. I have not seen your contracts, and what is in writing matters. Home warranty isn't free, they will also review the documents and could fight you as well.  

    0Reply
  • Billy Smith
    Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
    8y

    I have to admit the flippers work that I see around here  the mechanical   is always done half a... never done  right .

    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y

    For all those out of staters, this is the exact language from the FL As Is Contract used:

    11.  PROPERTY MAINTENANCE:

    Except for ordinary wear and tear and Casualty Loss, Seller shall maintain the

    Property, including, but not limited to, lawn, shrubbery, and pool, in the condition existing as of

    Effective Date (“AS IS Maintenance Requirement”).

    2Reply
  • David Song
    Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
    8y
    Kyle Houlahan Why are you talking to the buyer directly? Where is your realtor? As is sale is just that, buyer responsible for any hidden issues. Buyer is responsible for their own inspection and due diligence. If I were you, I would never even give the buyer my contact info. Let the realtor handle that. A seller is responsible for providing a transfer disclosure only. Everything else shall be left to professionals. After closing, there is no remorse period.
    2Reply
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