The Broken Fridge Dilemma

It doesn’t necessarily have to be your fridge. It could be any appliance or even your furnace or air conditioner. Regardless of whether it’s your fridge or your furnace, this type of situation occurs pretty often. In fact, it occurred to clients of ours just a short while ago. Here’s what happened, followed by a few suggestions about what to do if you ever find yourself in this situation:

Our clients accepted an offer to sell their home. Included in the sale price, as usual, were certain appliances, light fixtures, window coverings, the furnace, the air conditioner, etc. Theses items are referred to in agreements of purchase and sale as chattels (things that aren’t attached to the home, such as a fridge) and fixtures (things that are attached to the home, such as a light fixture). There’s also usually a clause in every agreement of purchase and sale stating that the chattels and fixtures will be in either good working order, their current working order or just working order on closing. Essentially, this means that they’ll be working on closing and that if something breaks before closing, it’s the sellers’ responsibility to get it fixed. This makes sense. If a buyer agrees to pay a certain price believing that he or she will receive working appliances, then he or she should be entitled to receive working appliances. Sounds simple enough, doesn’t it?

Like many things relating to real estate, sometimes they’re simple and sometimes they’re not. In our clients’ case, things weren’t so simple. Their fridge broke a week before closing. So call the fridge repair guy and get it fixed. Simple, right? But what if the fridge repair guy says that he needs a special part that’s out of stock and he won’t be able to get it until two weeks after closing. Not so simple, right?

The buyer was entitled to receive a working fridge on closing. The repair would have cost $150, but couldn’t be done until after closing. I suppose our clients could have bought a brand new fridge before closing at a cost of $1,000, but that wouldn’t have been the right outcome because the buyer didn’t contract to receive a brand new fridge and, except for the timing, our clients didn’t need to spend that much money to rectify the situation.

If you ever find yourself in this type of situation, it’s always a good idea to keep the lines of communication open with the buyers. Let them know what happened and tell them the steps you’ve taken to get the appliance fixed. This type of situation is often resolved by the buyers’ and sellers’ lawyers. Here are a few resolutions I’ve seen over the years:

  1. The sellers give the buyers a cheque for $150 and the buyers have the fridge repaired when the part arrives. (The problem with this resolution is that if the repair ends up costing more than $150, the buyers may be out of pocket if the sellers don’t agree to pay the additional amount.)
  2. The buyers’ lawyer holds back $300 on closing to cover the repair. If the repair is less than $300, as expected, the remainder is paid to the sellers. (This resolution covers the buyers in case the repair ends up costing more than $150.)
  3. The buyers decide that they’d prefer to buy a brand new fridge of their choice instead of having the existing fridge repaired. They accept $150 from the sellers and apply it to the price of their new fridge.

So what did our clients do? They went with number 2 above and dealt with the situation with cool heads, grace under pressure and efficiency. Remember,   there’s no cause to panic or get upset when something like this happens. A fridge, and almost all chattels and fixtures for that matter, constitutes a very small portion of the sale price. It can either be fixed or replaced. It’s just a question of dollars. When was the last time you saw a unique, once in a lifetime fridge?

As always, if you know of anyone who’s looking for an honest realtor who really knows his stuff and doesn’t pressure his clients, Please Don’t Keep Me a Secret. I really appreciate your referrals. Thanks for reading and don’t be shy if you have any questions or comments!

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