Punch List Questions
So the time of my inital walkthru to create the punch list has finally arrived, and I have a few questions (please excuse my naivete, I am totally new to buying property): I’m wondering, for new construction, is it common that the apartment would have gas hooked up so that the oven and stove can…
So the time of my inital walkthru to create the punch list has finally arrived, and I have a few questions (please excuse my naivete, I am totally new to buying property):
I’m wondering, for new construction, is it common that the apartment would have gas hooked up so that the oven and stove can be tried out?
Are things like cable connections and phone jacks able to be tested? (FYI, we are doing the walkthru with an inspector/engineer who came highly recommended by other Brownstoners.)
3) My lawyer tells me that it is common for an agreement concerning when the seller has to make any fixes found during the punch list creation to be drawn up and signed at closing. Has anyone ever heard this before or done it this way? I thought punch list items need to be addressed prior to close, and I know I was told earlier on that the punch list is in our closing requirements….
4) Any other general advice you have, please share. Obviously the inspector will be leading the way, but if you have advice on what I should be doing while he does his inspection, do tell!
Thanks all,
PV
We closed on a brand new condo last year. The gas and electric should be on so you can test whether the stove works, lights etc. I would go to a hardware store and buy an electrical outlet tester (less than $10) and test every outlet in the apartment, rarely there’s a problem, which is easily fixed. There will be items on your punch list, like a cracked tile or whatever, that the developer has to be given time to fix. If you check the offering plan, you’ll probably find that you don’t have the right to an escrow account for anything. One item on our punch list took six months, but it wasn’t something we were greatly concerned about (insect screen), but most things were fixed between the walk through and closing. Your lawyer is your best source of advice. If there are still apartments for sale in the building, the developer is still involved, so they’ll have a general contractor handy to fix things.
I wouldn’t get too concerned unless your developer is in chapter 11, or is a fly by night type operation.
You can also get an adjustment to the amount due. Or, in other words, seller reduces the price and buyer assumes responsibility to finish the punch list. In essence, you pocket the escrow amount but have to do the work yourself.
“You have the option of not closing if any of your punchlist items are not done.”
I assume this is a new construction condo?
You have the option of not closing if any of your punchlist. It can get legally hairy at that point. Usually you just agree on what absolutely needs to be fixed before you move in (gas, electricity, floors, whatever) before closing. The rest can be designated to be fixed on later date. At that point your attorney should include a rider that gives you specific schedule (like x days after closing).
Having punchlist not completely finished when you move in a new construction is very common. However, during these times of hurried construction you must do your due diligence in order to protect yourself.
I would not close until you are able to move in and therefore, I would assume you need the punch list addressed prior to closing. Unless, did you agree to purchase the new contruction unit prior to its completion?
First you have to agree on the punch list…what they will do and what they won’t.
Then it either has to be done or they have to escrow money for you if it’s not done by closing.
A lot of lawyers don’t like to do escrows at closing because, in reality, they get drawn out and a bit of a hassle.
Hi DIBS,
Follow-up for you: my lawyer said she didn’t think the seller would “go for” us creating an escrow account to deal with punch list issues. Is my lawyer nuts?
Thanks,
PV
The best scenario is to have all the punchlist items completed prior to closing. The real question for me is whether the space in its current configuration is substantially complete meaning that it can be used for its intended purpose. To that end, the all the appliances should be hooked up and tested. I would advise against goint to contract until substantial completion (and an amended C of O, if applicable) is obtained. Ed Kopel Architects.
You can negotiate punch list items prior to closing and then draw up a list of unresolved ones. Typically your lawyer will set up an escrow account to withhold money from the seller until such items are remedied.