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May 19, 2008
Disclaimer of Warranties on New Construction?
I'm close to signing a contract for a condo in a new building. However, the offering plan has a disclaimer of all warranties on the part of the sponsor, which my attorney has never seen before. Is anybody else familiar with these kinds of disclaimers? Is this a new "standard" provision or a sign that the sponsor is doing something underhanded?
Comments
What's the disclaimer say? and what does your attorney think, in terms of buy vs. walk away?
more info, please...
Posted by: guest at May 19, 2008 3:38 PM
I don't know the exact wording (that's what the attorney's for!), but my understanding of the meaning is that, once I buy the place, the entire building could fall down around me and I would have absolutely no recourse against the sponsor.
My attorney definitely does not like the look of the disclaimer, but I haven't asked her to advise me specifically on whether to walk away. The fact that she has never seen this type of broad disclaimer before makes me worry that the construction is sub-par or the building is on top of a sinkhole or something.
Has anybody else bought a newly built condo recently and encountered such a broad caveat emptor?
Posted by: davelk at May 19, 2008 5:07 PM
Just because the sponsor is trying to sneak in a broad disclaimer doesn't mean that the building if falling down. I bet the sponsor's attorney put that in there to see if they can get away with it (great for his client) with the understanding that the buyer's attorney will either take the disclaimer out or negotiate it down.
As far as the building falling down, that is what a pre-purchase inspector is for.
Posted by: guest at May 19, 2008 5:48 PM
I'd ask lots of questions before signing anything. Especially if your lawyer hasn't see this before.
Posted by: guest at May 19, 2008 6:01 PM
Get it struck from the contract. If your attorney has never seen something like it before, that should be a red light. Not that there isn't a first time. But, why would you want to agree to something like that? There are plenty of condos out there, and there will always be another one.
Posted by: guest at May 19, 2008 6:12 PM
Sounds like you know enough to know you want to get rid of the disclaimer. The question then is whether such a disclaimer is at all the norm around here these days. If so, it will be hard to get seller to agree to give it up. If it is truly an exception, you have a better chance of having the seller back down. I don't know the answer. Also, is the building selling out quickly or are units moving slowly. This will affect your leverage.
I assume your lawyer is finding other items that need modifying. Maybe your lawyer should just send back a revised contract with the offending term taken out, and see if you get a reaction.
Posted by: slopefarm at May 19, 2008 6:13 PM
Certain disclaimers are ilegal and and because of that, they are unenforcable
.Please ask your attorney about that.
Posted by: Ysabelle at May 20, 2008 12:40 AM
Actually, it's very common (in newer buildings of course). And legally, if anything should go wrong (even if you sign the disclaimer) you will have recourse.
Posted by: no permits at May 20, 2008 4:27 PM
Be very careful! Our lawyer did not include a standard phrase relating to the "warranties/guarantees made by the seller survive the closing of the contract" and we got SCREWED. The house had many hidden disasters that clearly the seller wanted to distance himself from, and he was obviously counting on that when all this came to light, it was no longer his problem. Which is exactly what happened. NY is a "buy it you own it" state and so without protection, you are screwed. You may want to have the seller put $ in escrow until you can do a thorough investigation and stipulate in broad terms that unless and until the house checks out, the $ stays in escrow, and if it doesn't check out, then the $ is yours.
Posted by: guest at May 21, 2008 8:38 AM
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