Property Condition Report

[The Darkness]

I'm in the process of selling a property, and the agent who's brought in a potential buyer (not a sole mandate agent), has asked that I sign a 'condition report' on the property. Any more experienced property owners out there who could maybe shed some light on any potential risks within a report like this (implied liability, latent defects being seen as patent etc). Also, the agent has worded this form in an ambiguous way that implies that she's my agent. Could this be an implied mandate if in future I look to privately sell? Any advice would be most valuable. I see there is a CPA clause regarding a 'condition report' however surely this should be set up by the attorneys and attached as a provisor in the OTP?

 

[ToxicBunny]

Tell her to fsck off.... Plainly and simply... It's part of an otp or you sign nothing... And it's checked by your lawyer first.

 

[3WA]

Tell her to fsck off.... Plainly and simply... It's part of an otp or you sign nothing... And it's checked by your lawyer first.

Are you sure about this? I think a condition report is a routine thing now. Since houses don't get sold voetstoots, the condition report defines what the seller did and didn't know about.

 

[jezzad]

Ive just purchased a place and the seller signed one, I asked them to add a couple of extra things. My assumption here is to cover and pre existing major issues and protect both seller and purchaser.

 

[ToxicBunny]

Are you sure about this? I think a condition report is a routine thing now. Since houses don't get sold voetstoots, the condition report defines what the seller did and didn't know about.

Yeah, it can be a routine thing, but it would be a part of an OTP, not something that is signed outside of that.

 

[3WA]

Yeah, it can be a routine thing, but it would be a part of an OTP, not something that is signed outside of that.

It lists all the things that the seller know is wrong with the property. Some buyers won't make an offer until they see it. As the seller, that's all fine if you want to play tough, but given what the market's like now, doesn't really make sense to me that the seller acts so tough. As a seller, one way or another, you do have to declare everything you know is wrong with the property, otherwise you'll create kak for yourself post-sale.

 

[ToxicBunny]

It lists all the things that the seller know is wrong with the property. Some buyers won't make an offer until they see it. As the seller, that's all fine if you want to play tough, but given what the market's like now, doesn't really make sense to me that the seller acts so tough. As a seller, one way or another, you do have to declare everything you know is wrong with the property, otherwise you'll create kak for yourself post-sale.

I suppose there is that, but I would be monumentally wary of signing anything from an agent that has any references to anything other than a list of known defects.

 

[Neuk_]

Yeah, it can be a routine thing, but it would be a part of an OTP, not something that is signed outside of that.

I remember seeing some or other condition type report when we bought our house but we only saw it when signing the OTP as you say.

 

[ProfA]

It's a trap. Do not sign. The only time you sign anything is at offer to purchase time.

 

[SauRoNZA]

Last I checked it's actually to remove liability from you by clearly stating up front what you know to be defective so it can't be claimed you tried to hide it afte the fact.

But usually this happens after an OTP and actual sale has started.

 

[3WA]

Last I checked it's actually to remove liability from you by clearly stating up front what you know to be defective so it can't be claimed you tried to hide it afte the fact.

But usually this happens after an OTP and actual sale has started.

So the buyer is meant to commit to the purchase before they can see the condition report? That doesn’t sound right.

 

[SauRoNZA]

So the buyer is meant to commit to the purchase before they can see the condition report? That doesn’t sound right.

There seems to be a confusion in terms here.

A condition report would he done by an objective third party....otherwise what’s the point?

A list of known defects would be provided by the owner. Usually after OTP, but I guess it would make sense to have it up front, just not usually the case.

It’s more of a bargaining for what the seller and buyer are willing to compromise on.

 

[3WA]

There seems to be a confusion in terms here.

A condition report would he done by an objective third party....otherwise what’s the point?

A list of known defects would be provided by the owner. Usually after OTP, but I guess it would make sense to have it up front, just not usually the case.

It’s more of a bargaining for what the seller and buyer are willing to compromise on.

The document where the seller lists the defects seems to be called the condition report:

Sellers must sign 'condition' report - Property24

In terms of the Consumer Protection Act, home sellers must sign a condition report providing all known details of defects on the property.

www.property24.com

And there’s no bargaining after the OTP is signed! The buyer has lost their only bargaining chip once they sign, since the OTP will set the purchase price! No sane buyer is going to sign an OTP before they see what defects the seller has declared.

 

[RonSwanson]

The document where the seller lists the defects seems to be called the condition report:

Sellers must sign 'condition' report - Property24

In terms of the Consumer Protection Act, home sellers must sign a condition report providing all known details of defects on the property.

www.property24.com

And there’s no bargaining after the OTP is signed! The buyer has lost their only bargaining chip once they sign, since the OTP will set the purchase price! No sane buyer is going to sign an OTP before they see what defects the seller has declared.

It depends. An OTP can be signed and agreed subject to a satisfactory third party condition report.

 

[SauRoNZA]

The document where the seller lists the defects seems to be called the condition report:

Sellers must sign 'condition' report - Property24

In terms of the Consumer Protection Act, home sellers must sign a condition report providing all known details of defects on the property.

www.property24.com

And there’s no bargaining after the OTP is signed! The buyer has lost their only bargaining chip once they sign, since the OTP will set the purchase price! No sane buyer is going to sign an OTP before they see what defects the seller has declared.

Having done this quite recently (three years ago) all defects were only listed well after the OTP was signed and formalized on both sides (my selling and buying on the other side.

OTP was also amended accordingly as compromises and/or agreements were made.

The article only suggests when this should be done, doesn't mandate when it must be done. So it quite likely is a condition of the OTP to begin with.

I fully agree though it would be most beneficial to have this document signed by the seller up front, simply illustrating that in reality and in my experience this has not been the case on both my own sales and purchases and that of my parents quite recently in the last few months.

 

[3WA]

It depends. An OTP can be signed and agreed subject to a satisfactory third party condition report.

Yes but the seller’s report declares what the seller knows. If the seller knows something, but leaves it to an independent assessor to find, they’re playing games that could come back to bite them if the buyer finds out.

 

[SauRoNZA]

So the buyer is meant to commit to the purchase before they can see the condition report? That doesn’t sound right.

The buyer needs to use their own eyes and come to their own conclusions.

The report is really just there to highlight anything they might not have seen or specifically been made aware of and as such protects the seller for anything the buyer wakes up to after the fact.

 

[SauRoNZA]

Yes but the seller’s report declares what the seller knows. If the seller knows something, but leaves it to an independent assessor to find, they’re playing games that could come back to bite them if the buyer finds out.

Precisely why I said it protects the seller more than it does anything for the buyer.

The seller could also happily declare they were completely unaware of any particular problem and that may be very well even be true.

 

[quovadis]

There's absolutely nothing wrong with a potential qualified buyer requesting any type of reasonable inspection or report to be done however condition reports are generally CPA related. You can even request any professional inspections for it to be done at their cost obviously with the exception of mandated reports such as electricity and plumbing where applicable.

Rejecting such a request would be a red flag to any buyer for obvious reasons.

My advice to any home seller is to get an inspection company to inspect prior to placing the home on sale and provide it to any prospective buyers - it protects you against any claims of latent defects etc at a later stage - if a professional inspector is unable to detect something how would you?

 

[ToxicBunny]

There's absolutely nothing wrong with a potential qualified buyer requesting any type of reasonable inspection or report to be done however condition reports are generally CPA related. You can even request any professional inspections for it to be done at their cost obviously with the exception of mandated reports such as electricity and plumbing where applicable.

Rejecting such a request would be a red flag to any buyer for obvious reasons.

My advice to any home seller is to get an inspection company to inspect prior to placing the home on sale and provide it to any prospective buyers - it protects you against any claims of latent defects etc at a later stage - if a professional inspector is unable to detect something how would you?

See now thats a different thing altogether and one I could agree to.

Have an inspection report available to all prospective buyers....

But if an agent came to me to sign anything other than an OTP after they've got a mandate on the property (and not sole) they would get told to get monumentally bent.