Distressed sales are never ideal for the sellers or residing tenants and can introduce a myriad of possible problems at close of escrow for a potential buyer.  What happens if the property is damaged or ‘trashed’ before Close Of Escrow (COE)?  What if the occupants leaving take appliances, fans, or fixtures that are supposed to convey or stay with the property?    What if a vacant property has had vandalism that has altered the condition of the home? 

What remedies do you have as a buyer of a home if one of the above problems arises shortly before close of escrow (COE) or recordation?

There is a short answer to this question and a long answer.  Most people want to know if they can refuse to close until the property is ‘whole again’ or demand some kind of compensation for the damage before close of escrow.  So here is the short answer:  Just because the other party has breached the contract, doesn’t give you a legal right to breach it as well.  How can you be breaching the contract by refusing to close escrow?  You agreed in the contract to close on a specific date.  Remember your mother telling you two wrongs don’t make a right? – Yep, it’s still true.

This post was originally 5x the current length it is now, because I started with the long answer.  The long answer involves taking a detailed look at the purchase contract we use in Arizona to define what the parties have agreed to in terms of:

1. the condition of the property
2. the inspection periods
3. the seller warranties
4. the seller’s obligation to inform the buyer of changes in the property
5. remedies the non-breaching party has against the breaching party

Thanks for reading!