Re-Inspection after storm just passed through while under contract?

[Kevin S.]

Hi members,

I have a SFH under contract, already completed inspection and scheduled to close in 2 weeks. In the meantime the recent hurricane/storm Debby just hit Florida. The property is in central Florida and Debby made landfall in northern Florida.

Is it required or recommended to do another inspection?   Do insurance company dictate this decision?

Will it be another full inspection or just the roof?

If there is damage can the price be re-negotiated or can I get out of the contract? 

I am assuming I pay for inspection again?

Is there anything else I need to consider?  

Anyone has experience with this situation?  Any advice/recommendations is appreciated.   Thanks in advance.

[Shawn McCormick]

@Kevin S. You need to read your contract to see what it allows for. You are likely out of your inspection period and the ways out for you are appraisal and financing contingencies. Ask your agent to draw up an addendum asking the seller to allow for a re-inspect. Maybe also ask the seller if there was any damage and if they are planning to file a claim.

Did the area get hit hard by storms? I wouldn't limit it to roof as wind and water can damage other areas of the home..what if a window was left open and the interior now has water damage etc...

Did you already bind your insurance (likely not if you are two weeks out) So there may not be a reason for them to dictate you get it reinspected. 

[Andrew Freed]

@Kevin S. - Normally in real estate contracts, the seller is required to deliver the property in the same condition it got under contract for. Ask your attorney and review the contract nonetheless that is the point of a final walkthrough. To ensure its in the same condition as when you got it under contract. At least in my state, I have recourse if the property is not delivered in the same condition as long as you have a solid contract in place. Think about it, what if the property had a fire and burned down before you close. Do you think you are required or can even get a mortgage on that property? Most likely not. 

[Kevin S.]

Quote from @Shawn McCormick:

@Kevin S. You need to read your contract to see what it allows for. You are likely out of your inspection period and the ways out for you are appraisal and financing contingencies. Ask your agent to draw up an addendum asking the seller to allow for a re-inspect. Maybe also ask the seller if there was any damage and if they are planning to file a claim.

Did the area get hit hard by storms? I wouldn't limit it to roof as wind and water can damage other areas of the home..what if a window was left open and the interior now has water damage etc...

Did you already bind your insurance (likely not if you are two weeks out) So there may not be a reason for them to dictate you get it reinspected. 

 Thank you Shawn.  All I have is a quote from ins. company for now.  They did not bind because they/we all had knowledge the storm was approaching.  They would only do after the storm passes.  I was told they would do an 'after storm' analysis and decide if it was within the affected area and if they would require another inspection.

My question is what if there is damage to the property?  Can I ask for reduction in price or walk away?  I don't see anything in the contract about any storm damage within inspection and closing.  The contract is the usual Florida realtor approved standard contract which you might be very familiar with being a Florida realtor. 

You did bring a good point about who will file claim?  My guess is the seller?

[Lynn McGeein]

@Kevin S. Most standard contracts have terms for the seller to deliver the property in the same condition, free of personal property, debris, etc., so if you have doubts that your seller plans to do that, maybe reach out and ask if the storm caused any damage that will delay closing, to make them aware you’re not going to accept new storm damage. I think they would need to file the insurance claim if there was enough damage, but possibly they could escrow an amount you’re comfortable with if lender allows. If the water heater worked fine at the inspection but leaking at the final Walk Through, they’d have to fix that. Storm damage should work the same way.

[Kevin S.]

@Lynn McGeein

Thank you Lynn.  I agree with you about the seller has to deliver property in same condition.  Hoping someone here has actually gone through such experience (had actual storm damage before closing) and how they navigated the process.  Appreciate your response. 

[Kelly Boulton]

Hey Kevin,

I was representing an investor that was purchasing a quad in Gainesville last year when a storm came through.  Although it delayed the closing by a week, here is what I learned:

It was the lender that had to reinspect.  Appraisal was already done and accepted.  With this bank, they only required time stamped photos to be submitted to prove their was no damage.  Allowing photos may have been an exception to their specific guidelines, but it was accepted.  If you are being represented by an agent, encourage them to be the "squeaky wheel." If photos aren't an option, a quick reinspect on 4 point will likely do the trick.

If your county was declared a state of emergency ahead of the storm, the bank will likely follow up to tell you what they require.  

In terms of getting out of the contract should there be damage, and it can't be negotiated with the seller--Line 439 "Force Majeure" will allow you to terminate the contract just as long as the property is within the designated state of emergency area.  This portion of the contract also states that if closing cannot be performed within a reasonable time due to delays past 30 days, you also have the option.

Hope this provides some useful insight!

[Kevin S.]

@Kelly Boulton

Thanks for your insights. 

If lender does the re-inspect, do they pay for it?  I am more concerned about roof damage since that is usually the biggest ticket item.  I don't mind paying for re-inspection.  I rather do that then find out roof damage after close.  

Any idea what extent of damage has to occur for the "Force Majeure" to apply?  I don't want to buy a house that need major roof work.   

[Theresa Harris]

As others said, the home needs to be delivered in the same condition as when you did the walk through.  You should also do a quick walk through right before it closes.  My lawyers have told me to walk the property that morning (or the night before) and call them to let them know if they should release the money.

You can also drive by the area to get an idea of the storm damage.

[Kevin S.]

@Theresa Harris

I agree.  I have been advised to do just that, to make sure the property still exists, as strange as it sounded to me initially.  

What do you do if there is damage either on day of walk thru or I find out with re-inspection? I am trying to have an answer before I find myself in that situation.  Hopefully not. Thank you and I appreciate your input. 

[Kelly Boulton]

Quote from @Kevin S.:

@Kelly Boulton

Thanks for your insights. 

If lender does the re-inspect, do they pay for it?  I am more concerned about roof damage since that is usually the biggest ticket item.  I don't mind paying for re-inspection.  I rather do that then find out roof damage after close.  

Any idea what extent of damage has to occur for the "Force Majeure" to apply?  I don't want to buy a house that need major roof work.   

I'm not sure if the bank would pay, but hopefully you have already reached out to them to see what they require to move forward.  If they are not willing to pay, I'm sure you could negotiate with the seller.  I wouldn't think it would be more than $150. Personally, I would eat the money up front to get someone on schedule asap and work with either the bank or the seller for a credit at close.

If there is roof damage, that would be an insurance claim on the current owner's policy.  You would not be responsible for the repair from damage.  This could be another reason the closing is delayed. Depending on the bank/loan type they could require that the claim is filed and there is proof of repair.  

As for Force Majeure, first this is not legal advice because I am NOT an attorney. Though when it came up last year with my client it was determined that you can easily use the county declared state-of-emergency as proof that there was a hurricane.  

So if there is damage that can't be rectified through reasonable effort with both parties (ie. damage that the buyer is not willing to claim on ins., won't credit you the cost to fix, a delay longer than 30 days while the bank is processing "re-inspection', ETC) than you can cancel the contract and receive your escrow back.  Remember, the seller is counting on this to close as well.  It sounds like the transaction is close to closing, which means instead of finding a new buyer, they'd likely be open to reasonable concessions.

Included full clause below...

FORCE MAJEURE: Buyer or Seller shall not be required to exercise or perform any right or obligation under this Contract or be liable to each other for damages so long as performance or non-performance of the right or obligation, or the availability of services, insurance, or required approvals essential to Closing, is disrupted, delayed, aused or prevented by a Force Majeure event. “Force Majeure” means: hurricanes, floods, extreme weather, earthquakes, fires, or other acts of God, unusual transportation delays, wars, insurrections, civil unrest, or acts of terrorism, governmental actions and mandates, government shut downs, epidemics, or pandemics, which, by exercise of reasonable diligent effort, the non-performing party is unable in whole or in part to prevent or overcome. The Force Majeure event will be deemed to have begun on the first day the effect of the Force Majeure prevents performance, non-performance, or the availability of services, insurance or required approvals essential to Closing. All time periods affected by the Force Majeure event, including Closing Date, will be extended a reasonable time up to 7 days after the Force Majeure event no longer prevents performance under this Contract; provided, however, if such Force Majeure event continues to prevent performance under this Contract more than 30 days beyond Closing Date, then either party may terminate this Contract by delivering written notice to the other and the Deposit shall be refunded to Buyer, thereby releasing Buyer and Seller from all further obligations under this Contract.

[Kevin S.]

@Kelly Boulton

Thanks for taking the time to write your response.  I am willing to bear the cost of re-inspection in order to move it forward.  I haven't heard back from insurance company yet whether they need a re-inspection before they insure the property.

Would you rely on inspector or a roofer/roofing company to tell me if there is roof damage?  On one hand roofer will know more than an inspector if there is roof damage but at the same time a roofer has an incentive to replace the roof.  What's your suggestion?

BTW, which part Florida do you represent?  

[Andrew Syrios]

You'll want to read the contract as it sounds like you are out of the inspection period but normally the seller is required by contract to provide property in condition it was in when it came under contract. So in the most obvious sense, if the house burns down, you are released from the contract. 

Look it over and if so, I would reinspect, particularly (but not only) the roof. 

[Corby Goade]

The real question here is does your contract afford you the right to a second inspection. And even if it does, what leverage do you have if there is new damage or changes to the property?

[Kevin S.]

@Andrew Syrios

Thanks for your input, Andrew.  You are right, I am out of inspection period.  I don't live in the city where it's located and don't think it burnt to the ground.  I am concerned about the roof mainly.  Trying to determine if I have the right to re-inspect, what to do if there is (roof) wind damage?  Will the seller be willing to file a claim if under contract?  How will this affect closing?

[Kevin S.]

@Corby Goade

Thanks Corby.

There is no wording in the contract about re-inspection.  Only mention the property has to be delivered in the condition it was during inspection.  I don't know if I have "right" to re-inspection if I am out of inspection period.  My guess is the seller will have no incentive to allow re-inspection.  And if there is wind(roof) damage then a whole lot of question arises.  Hoping some one here have had experience/knowledge of such event.  

[Corby Goade]

Quote from @Kevin S.:

@Corby Goade

Thanks Corby.

There is no wording in the contract about re-inspection.  Only mention the property has to be delivered in the condition it was during inspection.  I don't know if I have "right" to re-inspection if I am out of inspection period.  My guess is the seller will have no incentive to allow re-inspection.  And if there is wind(roof) damage then a whole lot of question arises.  Hoping some one here have had experience/knowledge of such event.  

In my state there is boilerplate language in the contract stating that if there is damage after the inspection but before close, the seller must repair to the buyer satisfaction. The buyer cannot terminate based on the damage but the seller must repair and closing can be extended in order to accommodate this.

[Kevin S.]

Quote from @Corby Goade:

Quote from @Kevin S.:

@Corby Goade

Thanks Corby.

There is no wording in the contract about re-inspection.  Only mention the property has to be delivered in the condition it was during inspection.  I don't know if I have "right" to re-inspection if I am out of inspection period.  My guess is the seller will have no incentive to allow re-inspection.  And if there is wind(roof) damage then a whole lot of question arises.  Hoping some one here have had experience/knowledge of such event.  

In my state there is boilerplate language in the contract stating that if there is damage after the inspection but before close, the seller must repair to the buyer satisfaction. The buyer cannot terminate based on the damage but the seller must repair and closing can be extended in order to accommodate this.

 Seem about similar to contract here but worded differently.  I will ask for re-inspection but if seller refuse and allow only walk through on day of closing I am no expert to know anything about the roof.  So even though contract states what it states, how to go about it is the challenge.  Thanks for your response, Corby.