AC goes out day before closing, not known until after closing
Hey everyone, I've been following for several months and just closed on my first buy and hold rental property on Friday at 2pm. After closing at the title company, I was informed that I would need to go to the previous owner's property management company to pick up the keys.
When I arrived, they informed me that there had been a service call the day before about the air conditioning not working. A tech was sent out that Thursday afternoon, and it was discovered the unit was shot and needed to be replaced for about $2,400. A bid was sent to the property management company on Friday morning to replace the AC unit, and that was forwarded on to the seller's agent at 1:37pm. I don't believe the owner of the property was made aware of it until after closing as well.
Is this just bad luck and I should move on or do I have any recourse since the issue was first reported to the property management company prior to closing? Either way, I have already scheduled the AC unit to be replaced!
Thank you in advance!
Dan
@Dan Rose It depends on your contract and what's traditional in your area. Usually, it is up to the buyer and the buyers inspector to identify any possible problems and either, continues as-is, cancel the contract, request repairs or concession on the purchase price.
However, if you have confirmed written communication that the property manager knew about it and was working on bids already prior to closing it doesn't hurt to ask the seller to pay for it because depending on the contract they may have and usually would have an obligation to disclose that "new defect" but they are not usually otherwise obligated as they could just as well say you should have seen from your inspection that it was 20 years old anyways.
Best case may be to ask the seller to at least split the cost but would not be worth your time or money to go after them if they say tough luck and welcome to the world of being a landlord!
@Brian Poirrier, thank you for the feedback. That's along the lines that I was thinking but just wanted to make sure I wasn't missing something in regards to this. Thanks again for taking the time to reply!
@Dan Rose didn’t you have it inspection during the home Inspection? At the very least it should have been known it’s very old
@Caleb Heimsoth Yes, an inspection was completed and the AC unit's age was noted at that time, but he thought it may run for several more years before having any major issues. It's not a major surprise the AC quit, just bad timing on my end. At any rate, I'm still excited about the purchase!
Originally posted by @Dan Rose:@Caleb Heimsoth Yes, an inspection was completed and the AC unit's age was noted at that time, but he thought it may run for several more years before having any major issues. It's not a major surprise the AC quit, just bad timing on my end. At any rate, I'm still excited about the purchase!
I would get a second opinion on if the whole thing needs to be replaced or not. Most AC repairs are rather inexpensive