Broom clean vs. present condition.
By James L. Goldsmith, Esq.
The fabled and much loved standard agreement, ASR, provides that, at settlement, the property will be transferred to buyer “free of debris, with all structures broom-clean.” This seems simple, but consider that this agreement also provides that buyer “agrees to purchase the Property IN ITS PRESENT CONDITION, subject to inspection contingencies . . .”
If the property was a pigsty when the agreement of sale was executed, can seller deliver the property in that condition or is seller required to remove the “debris” and make it “broom-clean”? The question is seldom asked as most buyers who are acquiring a fixer-upper (or pigsty) know what to expect and usually get it. Unfortunately, disputes over the property’s condition occasionally erupt at the pre-settlement walkthrough on the morning of settlement.
The answer to the free-of-debris-broom-clean vs. present condition question can be tricky. The language requiring the property to be free of debris and broom-clean is intended to deal with the superficial condition; that is the condition that exists at or on the surface. Synonyms might include “slight,” or “surface.” The requirement that the property be delivered in its “present condition,” however, makes reference to the systems of the property, the working condition of utilities and components and those things that are material to the transaction.
There may not be bright lines that distinguishes these concepts and you can you’re your own determinations somewhat easily. A dog-of-a-property with holes in the plaster and no serviceable HVAC system or plumbing should be delivered with all refuse removed from the floors and yard and the surfaces brushed down or swept to the extent possible. The question becomes harder when there are building materials on the property the buyer may not necessarily plan to incorporate into its refurbishment (assuming buyer is not demolishing the property).
For these reasons it is better to address the problem before it arises. In other words, when the agreement of sale is being penned, consider how the property is to be delivered. There is no reason why “broom-clean” can’t be deleted from the contract. Better yet, consider adding an addendum that specifies what the condition of the property is to be in at settlement. Provide as much detail as possible and end the addendum with something to the effect that “to the extent that the provisions of this addendum conflict with the pre-printed provisions of the agreement of sale, the provisions of this addendum are to prevail.”
Copyright © James L. Goldsmith, Esquire, CALDWELL & KEARNS, P.C., 2014
All Rights Reserved
Jim Goldsmith is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees. He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. Jim also defends REALTORS® in disciplinary hearings conducted by the Real Estate Commission. He routinely counsels employers on employee relations issues and is one of the voices of the PAR Legal Hotline. He may be reached at www.caldwellkearns.com.