Can Mother Nature Derail Your Sale?

Everything is on track. You have a great buyer who is willing to pay a good price. Your real estate attorney has negotiated the best possible terms into your Purchase and Sale Agreement. The buyer’s home inspection is over, and her financing commitment is in place. What could possibly derail this transaction?

In our unpredictable climate, it is increasingly more common for a seller to be surprised by an extreme weather event involving snow, ice, wind or rain. These storms can cause problems ranging from a temporary power outage to more costly structural damage. If you are in the process of selling your house, such damage can be devastating.

Understand your obligations. When purchasing a home, a buyer will typically have a home inspection at the beginning of the process. At that time, the buyer may negotiate cost concessions from the seller or request that certain repairs or improvements be completed prior to closing. In order to be contractually binding, any such concessions or requests must be added to the final draft of the Purchase and Sale (P&S) Agreement before it is signed by the parties. Aside from those issues specifically listed in the agreement, the standard P&S Agreement typically provides that the buyer is purchasing the property “as is”, with the exception of reasonable wear and tear from normal usage.

Under the standard P&S Agreement, the seller may take a 30 day extension to make the property confirm if it cannot be properly delivered on the contracted closing date. In the event of a storm which causes flooding or structural damage (e.g. if a tree were to fall through the roof), where the property is often not able to be delivered on the closing date in this contracted “as is” condition, the seller may typically take this extension to attempt to bring the property to compliance. In the alternative, the parties may agree to close as scheduled with a price reduction to reflect the cost of repair assumed by the buyer.

Under the standard agreement, the seller is also responsible to maintain insurance on the property until the closing, when the ownership interest is officially transferred to the buyer. The seller is usually only required to maintain the insurance that is presently in place at the time that the agreement is signed. When major damage to the property warrants an insurance claim, the buyer usually also has the option of accepting the insurance proceeds with the property in its damaged condition.

Avoid damage. Although it is impossible to predict with certainty whether a storm will hit or if it will damage your house, it is important to take immediate actions to prevent damage whenever possible. If torrential downpours are predicted in your area, and if your basement has experienced flooding in the past, get your pump ready. If there are trees near your house, consider trimming the branches to avoid damage. If a hurricane is coming, bring in the lawn furniture. These preemptive steps may seem like common sense, but are often overlooked by the seller who is focused on an upcoming closing or moving date.

Act quickly. Once the storm strikes, identify any damage and quickly take steps to repair it. If there is flooding, quickly remove the water and do whatever possible to eliminate the resulting moisture, which may cause mold. Do not delay in calling a contractor to repair roof or other structural damage. In the event of a big storm, the best local contractors will be receiving many calls, and you may experience delayed responses (and sometimes no response at all). If you do not know who to call, your real estate broker or attorney should be able to refer you to a local contractor. The longer such issues are allowed to go un-remedied, the greater the ultimate cost.

If the damage is significant, contact your insurance company immediately to initiate a claim. In the event of a major weather incident, the insurance company will likely be inundated with claims. Often, your insurer will need to appraise the property damage prior to authorizing repair. Get your paperwork together quickly and stay on top of your claim in order to avoid delays in the appraisal process.

Unfortunately, there is not much anybody can do to manage our increasingly unpredictable weather. Although the buyer is usually entitled to walk away from purchasing a property that sustains major damage, you can do everything possible to avoid or minimize the damage, and ensure that your sale is not completely derailed by a natural disaster.

Jessica Sales Cohen is a partner at Cohen & Sales, LLC, a Waltham based law firm with a combined 30 years of experience in Real Estate Conveyancing and general litigation. For more information contact Cohen & Sales, LLC at (617) 621-1151 or

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