Q: We are in the process of buying a new home. We signed a contract, paid some earnest money, started the paperwork with the bank (they’ve already done the appraisal) and paid for a home inspection.
During the home inspection, the inspector found that the air conditioning system was not “matching” equipment. In other words, the inside and outside units were different sizes.
To most people that might not mean much, but my family has an extensive background in heat and air. So I got all of the equipment model and serial numbers and called my brother who just happens to sell the same brand of equipment in another state.
He actually checked with the manufacturer and they confirmed that this equipment is not recommended to run together and “should” not work as-is.
The problem was reported to the developer and at last word the builder had checked with the air conditioning contractor and the contractor stated that he had done many systems like that and there was no problem and he wasn’t going to change it, even though it goes against manufacturers recommendations.
Given that it’s winter, we can’t test the air conditioner.
Our decision was to only go forward with the deal if the builder either changes out the equipment to a correct, manufacture-approved system, or if the air conditioning contractor provides a specific warranty that guarantees the system through the first summer, or if the builder guaranteeing the system through the first summer.
We feel if the system is a problem it will show up almost immediately when hot weather hits and we have to start using it.
If the developer refuses either of these options, will we have grounds to walk away from the contract and require them to refund our earnest money and reimburse us for the cost of the home inspection and fees to the bank for the appraisal? These funds were spent based on the premise that the new house was in good working order and that any items found in the home inspection would be fixed.
Thanks for your time.
A: I’m always amazed when a builder says, “Well, I do it all the time.” But as you’ve found out, the builder has probably violated the manufacturer’s warranty, which means that if you do have trouble, the manufacturer won’t step up and back the system.
It also sounds like the builder won’t step up and guarantee the work either.
What you need to do is find a good attorney who can review your documents and determine what rights you have under the contract. The builder may or may not cover the heating and cooling system under a builder warranty. Some builders exclude these systems because the manufacturer’s warranties would cover their repair. You could find yourself without any warranty if the system fails and the builder doesn’t back his work.
Then again, maybe not. Builders are having tough times, and my guess is that some will do almost anything to get you to sign on the bottom line. I’d hate to see the builder agree to your demands, and then, after you’ve closed, refuse to come back.
When you meet with your attorney, you should not only review your contract to purchase the home, but also the specifications for the home. If the builder’s specifications stated that they were installing “matching” cooling and heating systems and they don’t, they may not be complying with the terms of the contract.
You might want to knock on a few doors in the neighborhood and talk to homeowners about their experiences with the developer or builder. Do they come back and fix punch list items promptly? How have the homes held up? How has the air conditioning and heating systems held up.
The homeowners’ answers should tell you everything you need to know. Then you can decide how to proceed.
As far as canceling the deal and getting your money back, you’ll have to discuss that with your attorney. Generally, if you had the right to cancel the deal you would get your money back but you most likely would not be able to recoup expenses, such as the appraisal.
Published: Mar 4, 2007