01/17/2025
Realtors!! To include, or not to include, that is the question.
I have seen the new form of the standard SREC contract, and the part that seems poorly understood is the new checkboxes around âincluded or not includedâ.
Section 6.2(c) states: âThe attached and unattached goods included herein, are owned by the Seller and conveyed to the Buyer under this contract and are in normal working order and are free and clear of all encumbrances and shall be and remain as is at the acceptance of this contract until completion date. The Purchase Price shall include land, buildings and attached good, unless otherwise state herein, and including the following unattached goods:
What usually follows is a usual list of chattels to be included, like fridge stove, etc. The contract goes on to say:
âIn addition, the Purchase Price shall also include the items as indicated below:â
And there are 10 things listed, and of those items, 5 have the ability to check off both if they are included or not included, and also if they are rented or owned. Those 5 are:
⢠Water heater
⢠Water Softener
⢠Alarm System
⢠Furnace
⢠Central AC
The premise of this change is pretty good. We have had so many deals in which the lack of clarity around ownership status has caused headaches after the deal is done. However, I donât think that the use of these checkboxes is clear.
My first instinct in how to use these checkboxes is to say â âIf the water heater is rented, and staying behind with the property, then I should say it is included. The water heater will remain rented, and the new owner is assuming the rental.â
The problem is that the contract defines âgoods includedâ as being owned by the Seller. So one interpretation of the contract would be that by checking included on a rented water heater is that you are committing to buy out the rental. The other interpretation is that by checking the ârentedâ box that you are altering the previous term, and confirming that it is staying behind, but as a rental. I could build an argument on either side, but until you had a clear direction from a court (and I havenât researched to see if a different jurisdiction has already decided this), it is unclear. The context of how the agreement was formed would probably assist in its interpretation.
It feels like this section needs a tweak for clarity. More like:
__Rented __Owned __Not applicable.
If Rented - __ Assumed by Purchaser __ Purchased by Vendor __Removed from Property.
Or something⌠That was just a first stab.
Interim advice â if you have a rented chattel, and you want to be clear about what is happening with it, you may want to include a Schedule âAâ.
