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deedles75, Home Owner in East Brunswick, NJ

Monies in Escrow after closing for Repairs

Asked by deedles75, East Brunswick, NJ Thu Aug 8, 2013

The ac was not working at time of original walk-thru and the seller was advised it needed to be fixed. Unit was re-charged the invoice was supplied for proof. Day of closing walk-thru showed the ac did not work. Agreed to close and the escrow agreement drawn up only states " in order to close on the date, the parties agree to hold "x" amount of dollars in escrow in order to resolve the air conditioning issue."
Company who recharged ac looked at the unit the day after closing and wrote up coil is leaking and the unit is old and should be replaces. She receives a VM from the HVAC company saying they made deal with seller to repair coil for 925.00 even though normal cost is 1400. Had another co. look and they advised coil is no longer made.New coil and furnace needed to make functional (new unit is recommended). Seller will not negotiate and is ONLY authorizing 925 based on his deal and threatning legal action for the remaining money in escrow. Can he do this??

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I must agree with the other Realtors, if it is fixable and the part is available then that should suffice. Just because they agreed to hold money in escrow after close to cover the repair does not mean they have to agree to pay for a new unit. It should be resolved between the 2 attorneys at this point.
0 votes Thank Flag Link Sat Aug 10, 2013
We are not disagreeing to a new coil. The problem is he will only authorize 925 to be released which is the amount that he made a deal with the company he used before the normal cost is 1400 (as stated by this company as well). We are not comfortable using this company because they serviced the unit before and still didnt work. We do not see why we should be forced to use this company so that we dont have to put extra money out. All the other companies that we have had come out estimate it (if available) in the ballpark of 1400 to repair..
Flag Sat Aug 10, 2013
Of course, you need to get to your attorney.

Sounds as though if the leaking coil is replaced and it works, then it works. But of course we do not know more than what you wrote. Did they agree to replace the unit or fix it? A lot of times inspectors "recomend" replacement because it benefits them in long run so they can say, well I did reccomend that you replace the item. -or- a company that just wants to make the moeny off replacing the unit with no intention of fixing. Tough to say... Maybe a coil is all it needs.

But you need to have your attorney address the issue.

Good Luck!
0 votes Thank Flag Link Thu Aug 8, 2013
Hello Deedles75,

This is why it is important to use an attorney who specializes in real estate. Your attorney should be handling this issue and providing you with advice.

It doesn't sound like you got a home inspection because this is something that would have been discovered during a routine home inspection. If the air conditioning unit broke after the home inspection then I understand why it became an issue so late in the process. This is also a good example of why a home warranty is money well-spent.

If the replacement parts/unit is of reasonable quality and the work is done by a reputable company I am not sure why you would be so concerned about cost to the seller. You can always have the work done by a contractor of your choice at your cost.

I suggest you contact your attorney and follow his/her advice.
0 votes Thank Flag Link Thu Aug 8, 2013
Home inspection was done and were advised ac unit was not working and needed to be addressed. Seller had company come and they repaired unit by recharging it and provided us with the invoice to show proof of work prior to closing. At closing walk-thru air was not working. Was advised to close and sign escrow agreement holding 3000 for repairs.
Seller will only agree to 925.00 that the company he negotiated a deal with advises it will cost. This is the same company that recharged the unit and it did not last more than a month. I will be unable to have the repair done by anyone else for that 925. The seller is unwilling to allow any more money from the 3000 being held in escrow and is now threatning to take legal action to get the money he is not authorizing back. My attorney (same one I used for closing) just keeps asking me what I want to do. At one point she told me she was just the escrow attorney and I would have to take him to small claims court. Not sure what to do now.
Flag Thu Aug 8, 2013
Your attorney will be able to advise you on the options available.
0 votes Thank Flag Link Thu Aug 8, 2013
Attorney is not being helpful at all. Just keeps saying let me know what she wants to do.
Flag Thu Aug 8, 2013
This is a contract issue & needs to be addressed by the buyer's & seller's attorneys as it stems from condition of property at work thru.
0 votes Thank Flag Link Thu Aug 8, 2013
Thank you. That was what we thought, but have been dealing with our attorney and the Legal Secretary from the Seller's attorney. He will only authorize the 925 from his deal with the people he had and is not willing to look at any of the information provided saying this will not cover the costs.

The Escrow agreement was so vague, that I do not think there is any legal action on his part to be had at this point.
Flag Thu Aug 8, 2013
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