Denver Real Estate Lawyer and Family Law Blog (Vol. 1.70)
January 24, 2016
By Craig Franklin Chambers, Esq. 7851 S. Elati Street #204, Littleton, CO 80120
The Littleton Lawyer
In my role as a real estate attorney, family law attorney, and real estate broker in Denver, Lakewood, Littleton, Highlands Ranch and the surrounding areas, I run across terms I think could be better explained. Furnace or roof "Certification" is one of them.
In the Colorado Real E.state Commission contract for the purchase of a home, the residential real estate contract allows for a home inspection, and it is a good idea to have as many types of inspections as the buyer feels are appropriate given the age and condition of the home.
It is important to know what you are buying. An independent and professional set of eyes is useful in determining if the buyer should proceed with the transaction. The buyer's recourse, if the home fails inspection, is to terminate the contract,, waive the inspection defect, or renegotiate the real estate transaction.
If there is doubt as to the condition and the future longevity of a component of a home--usually the roof or the furnace--a home inspector will suggest --or a lender will require-- a "certification" of that component. The five a year requirement is the general practice of lenders ot require that a roof or a furnace have five years of life in order to give the buyer a loan.
Licensed contractors even charge to inspect either the roof or the furnace and certify that it has five years of life remaining. The problem is that the real estate brokers and the lender treat the certification as just another form for the file. Many of the buyers are led to believe the certification is a warranty.
First thing to know, a certification is not a warranty. It is an opinion for a fee--usually made by a contractor with whom the seller or the real estate broker is familiar--that the component is functioning properly on the day of inspection. Although the "certification" is for five years, the buyer has no recourse against the contractor should the component fail within five years..
Second point, the buyer should beware that if a certification is required or suggested, the underlining meaning in that the roof and furnace affected component is likely in need of replacement.
Lastly, the buyer should conduct further investigation and not rely on the certification as anything other than a purchased opinion for the real estate broker to put in the file.
The buyer should go into a real estate transaction eyes open, fulling understanding all the terms of a residential real estate transaction.