Hi,
I'm working on due diligence on an accepted offer on a bank-owned foreclosure in Edmonton. Note that this is not a court ordered sale - the title has already been transferred from the foreclosed owner's name into the name of the bank (I've confirmed with title search).
My realtor has advised me that once subjects are removed the property will be assumed "as-is, where-is". The terms of this are defined in an attached Schedule A in the sales contract.
My question is related to who is responsible for the property risk from the period after conditions are removed until the sale closing date? Here's the relevant clause in Schedule A:
***
The Buyer acknowledges that the Buyer has inspected the Property and the Property shall be conveyed to the Buyer on a totally "as is/where is" basis, as at the date of closing. The Buyer further acknowledges that the Property will not be cleaned further by the Seller and that the Seller will not pay to professionally clean the Property. The Buyer shall assume liability over remediation of any damages to the Property, whether noted on the inspection or not, and shall not seek recourse against the Seller for any costs thereof. The Buyer shall not call for compliance with or satisfaction of any work orders, deficiency notices, health notices or orders to comply regardless of the date of issuance, and shall assume title to the Property without requirement for discharge of any such orders or notices, if registered. The Buyer shall also assume without adjustment, and be solely responsible for, any and all unpaid local improvement charges, homeowner association fees, neighbourhood residents associations charges, [...] and any costs related to cleaning up the Property if there are any hazardous substances thereon.
***
As an example, let's say that after the conditions are removed that someone breaks into the property and vandalizes it. Who would be responsible for the damage, the bank or me? If I own the liability then does anyone have any suggestions for how I can mitigate the risk?
This deal has a 17 calendar day period between condition removal and closing, so the risk window is short, but the impact is high if something bad occurs. Is it possible to get insurance during this short period even though I technically wouldn't own the property?
I've sent this question to my lawyer as well, but he's not available right now with the Christmas holidays. I figured I'd try checking the REIN brain trust to see if anyone can offer any advice. Anyone have any feedback or advice on how to manage the risk?
I really appreciate any help you can provide!
I'm working on due diligence on an accepted offer on a bank-owned foreclosure in Edmonton. Note that this is not a court ordered sale - the title has already been transferred from the foreclosed owner's name into the name of the bank (I've confirmed with title search).
My realtor has advised me that once subjects are removed the property will be assumed "as-is, where-is". The terms of this are defined in an attached Schedule A in the sales contract.
My question is related to who is responsible for the property risk from the period after conditions are removed until the sale closing date? Here's the relevant clause in Schedule A:
***
The Buyer acknowledges that the Buyer has inspected the Property and the Property shall be conveyed to the Buyer on a totally "as is/where is" basis, as at the date of closing. The Buyer further acknowledges that the Property will not be cleaned further by the Seller and that the Seller will not pay to professionally clean the Property. The Buyer shall assume liability over remediation of any damages to the Property, whether noted on the inspection or not, and shall not seek recourse against the Seller for any costs thereof. The Buyer shall not call for compliance with or satisfaction of any work orders, deficiency notices, health notices or orders to comply regardless of the date of issuance, and shall assume title to the Property without requirement for discharge of any such orders or notices, if registered. The Buyer shall also assume without adjustment, and be solely responsible for, any and all unpaid local improvement charges, homeowner association fees, neighbourhood residents associations charges, [...] and any costs related to cleaning up the Property if there are any hazardous substances thereon.
***
As an example, let's say that after the conditions are removed that someone breaks into the property and vandalizes it. Who would be responsible for the damage, the bank or me? If I own the liability then does anyone have any suggestions for how I can mitigate the risk?
This deal has a 17 calendar day period between condition removal and closing, so the risk window is short, but the impact is high if something bad occurs. Is it possible to get insurance during this short period even though I technically wouldn't own the property?
I've sent this question to my lawyer as well, but he's not available right now with the Christmas holidays. I figured I'd try checking the REIN brain trust to see if anyone can offer any advice. Anyone have any feedback or advice on how to manage the risk?
I really appreciate any help you can provide!
