Rental Property Investor · Prairie Village, KS · Member since 2017 · 23 posts · 10 votes
I have a single family rental under contract. During the inspection period, I had an electrician look at the home because it has aluminum wiring. He said it wasn't up to code and potentially hazardous due to improper connections so we wrote and addendum to the contract requiring a LICENSED electrician to inspect and make repairs to all outlets, switches, and fixtures and the Seller to provide proof of work prior to closing. They sent over a receipt last night for an electrical company that seems to have been out of business since 2014 and neither of the individuals to whom the LLC was registered are currently licensed electricians in my state. The Seller is saying that he's fulfilled the obligation but it's clear to me at least that he hasn't provided enough info to prove he has had a licensed professional perform the work. Looking for a little guidance on how you guys would handle this situation going forward and what my options are.
Developer · Waxhaw, NC · Member since 2020 · 12 posts · 13 votes
5y
@Kevin Gallagher being a licensed electrician in the state of Washington. I have ran into this multiple times on service calls. Plain and simple, aluminum is no good for “branch circuits”. Aluminum does have its place for large service wire or feeders.
The reason why aluminum is bad for smaller conductors is, aluminum has a high expansion and contraction rate. It works its way out of wire connections, like wire nuts, or terminations like receptacles or switches. Most electrical contractor will not touch aluminum wire because of the high liability of it failing, or causing fires down the road and will want to run copper in its place($$$). This is the same reason why your insurance will most likely be higher for a property with aluminum branch circuits. Be sure to check with your insurance company to see if there is any unforeseen cost of ensuring this property.
All investors should be aware that there are special wire nuts and connectors that will connect aluminum to copper, legally, but are expensive. Most off-the-shelf receptacles and switches are “copper only” devices. If you are looking to do any work electrically with aluminum wire understand it will be more expensive, even something as simple as swapping a light fixture.
Best of luck with your endeavors and as always, do it proper, do it copper. 
Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
5y
I would not close on the property in this situation. This can be extremely costly for you in the long run, especially if you're putting a tenant in place. Chances are the seller knew what he was doing when he chose to go with an unlicensed electrician when you specifically spelled it out in your contract that it needed to be a licensed electrician. He was looking to cut corners and that's a bad sign for you. Since you had it clearly spelled out in your contract, it seems pretty clear he's in breach of contract (if you can, indeed, prove the workman is unlicensed) so you should have no trouble getting your earnest money back. Or go back to the seller if you really want this property and ask for a concession that covers your risk for having a licensed contractor get in there and do it right.
Contractor · NYC · Member since 2020 · 87 posts · 64 votes
5y
I dont know how your area works, but in NYC / NJ , you need a permit to perform any electrical work. I would check and see if a permit was pulled. That would be step 1.
Rental Property Investor · Prairie Village, KS · Member since 2017 · 23 posts · 10 votes
5y
@Rich Ramjatan thanks Rich. The house is in Missouri which actually doesn’t even require someone to be licensed to perform electrical work and definitely no permits required. Which is why I specifically wrote licensed into our contract to make sure he didn’t do the work himself or something like that. I appreciate your help!
Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes
5y
Personally, I wouldn't ask for repairs to aluminum wiring. I would replace all the wiring. And I don't ever trust sellers to make repairs. There is no incentive for them to do a great job or do anything but find the cheapest. They should credit the buyer or reduce the price if the buyer thinks that's their responsibility.
In this case, if they agreed to have a licensed electrician do work, and then didn't , they are in breach of the contract and you can back out. You can't really force them to do something, although the threat of you backing out may make them fix this. If they balk about giving your escrow deposit, you could be in for a fight.
Developer · Waxhaw, NC · Member since 2020 · 12 posts · 13 votes
5y
@Kevin Gallagher being a licensed electrician in the state of Washington. I have ran into this multiple times on service calls. Plain and simple, aluminum is no good for “branch circuits”. Aluminum does have its place for large service wire or feeders.
The reason why aluminum is bad for smaller conductors is, aluminum has a high expansion and contraction rate. It works its way out of wire connections, like wire nuts, or terminations like receptacles or switches. Most electrical contractor will not touch aluminum wire because of the high liability of it failing, or causing fires down the road and will want to run copper in its place($$$). This is the same reason why your insurance will most likely be higher for a property with aluminum branch circuits. Be sure to check with your insurance company to see if there is any unforeseen cost of ensuring this property.
All investors should be aware that there are special wire nuts and connectors that will connect aluminum to copper, legally, but are expensive. Most off-the-shelf receptacles and switches are “copper only” devices. If you are looking to do any work electrically with aluminum wire understand it will be more expensive, even something as simple as swapping a light fixture.
Best of luck with your endeavors and as always, do it proper, do it copper. 
Rental Property Investor · Prairie Village, KS · Member since 2017 · 23 posts · 10 votes
5y
Would you consider it equivalent to have a licensed electrician inspect work performed by a non-licensed electrician for safety and code compliance? Or does work need to be performed by the licensed electrician themselves to truly avoid liability?
Developer · Waxhaw, NC · Member since 2020 · 12 posts · 13 votes
5y
@Kevin Gallagher short answer; yes I would consider it equivalent if a license electrician signed off on it.
Long winded answer;
Because every contractor has their own threshold of liability. It is hard to say what your trusted licensed electrical contractor will say. Some will be willing to just look at it and reduce their warranty or give you no warranty and take your money. Others will tell you that they will have to rip it all out and replace it because it's unsafe. The best thing to do is ask questions to find out what their knowledge on the subject is and their threshold of liability. Like REI‘s no electrician knows it all and some have not ran into aluminum branch circuits in their career. If your trusted license electrician has, it would be simple for them to verify that the connections were legal.  The most common way to fix this issue is using "Ideal 30-765 wire nuts" (purple wire nuts) or similar UL listed connector at every junction and termination in the house. As Brandon Turner says "it is not easy, but it is simple". Good luck.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
5y
Pretty simple, they didn’t fulfill their end of the contract so it isn’t really about what the seller thinks. Tell him you will not be moving forward until the work is completed or in this case at least inspected by a licensed electrician to verify the work was done to code, etc.
In the future consider getting a credit for inspection in lieu of the seller coordinating the repairs. This way you can choose the contractors.
Rental Property Investor · Prairie Village, KS · Member since 2017 · 23 posts · 10 votes
5y
@Michael Noto getting a credit toward closing was my first offer but the Seller countered with finding an electrician himself and showing proof. I see why that was his offer now... haha
Lesson learned on my part to not trust a Seller with something like this.
Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
5y
@Kevin Gallagher
How bad do you want the property and how much of a discount are you buying it at? It may make sense to just have your licensed electrician quote you to make any repairs (my electrician would not even charge me just for a quote). If the cost if marginal, and you're still making money, take it on the chin and proceed closing. My two cents
Rental Property Investor · SF Bay Area · Member since 2018 · 49 posts · 54 votes
5y
As the electrician above said, the aluminum connections can come loose over time. Many electricians will simply RE tighten the connections at the panel and switch/receptacle and it should be just fine. The problem is that when these wires are left I tightened for 40 years and a fire begins. Personally I’d feel just fine if the connections were RE tightened.
@Rich Ramjatan thanks Rich. The house is in Missouri which actually doesn’t even require someone to be licensed to perform electrical work and definitely no permits required. Which is why I specifically wrote licensed into our contract to make sure he didn’t do the work himself or something like that. I appreciate your help!
I do not know Missouri state/county/city code but this sounds incorrect. In a 30 second search, I saw this for Springfield. I suspect it is the same for county and state.
Electrical
An Electrical Permit is required to do all electrical work except the replacement of lamps, the connection of portable appliances to suitable, permanently installed receptacles, or for the replacement of over-current protective devices which have become defective or inoperative.
Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
5y
@Kevin Gallagher I wouldn't ask for their electrician to fix anything but I would have asked for my licensed electrician to send a quote to the Seller side and that amount should be credited at closing.
The reason for this is that the seller just doesn't have any financial interest to fix anything properly. More importantly, in the apartment investing world, any asset with aluminium wiring is a deal-breaker. Cooper wiring is always preferred!
At this point, the best thing is to ask for credit at closing based on the fact the job has not been performed as agreed to in the contract by a licensed contractor.
Hopefully, this Seller is reasonable, if not you might have to back out of this deal and you will thank yourself later.
Sometimes, the best deals are the deals we don't do!
Rental Property Investor · Prairie Village, KS · Member since 2017 · 23 posts · 10 votes
5y
@Ola Dantis thanks for your input. I tried getting a credit before but they insisted on doing the work themselves. Lesson learned for next time... I am going to offer again to take a credit or back out
@Ola Dantis thanks for your input. I tried getting a credit before but they insisted on doing the work themselves. Lesson learned for next time... I am going to offer again to take a credit or back out
Yup, you don't ask you don't get right. Classic rule of negotiation!
Moreover, you don't have to ask for the full amount this time, you can ask for half of it.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
5y
Is this repair so large or the deal so skinny that this repair turns a good deal in to a bad deal or are you just stuck on it as you thought you’d won the negotiation?
I personally wouldn’t care if it was done by a licensed professional if my licensed professional said it was fixed. If they said it wasn’t fixed you could send that to the seller saying it still isn’t fixed. I don’t know if MO laws require invoices to have electricians license numbers on them but you could find out. If not, you could simply ask for his license number.
Real Estate Agent · Joplin, MO · Member since 2018 · 112 posts · 96 votes
5y
@Kevin Gallagher my friend, do your best not to get in your own way! We say “don’t step over dollars to pickup dimes.” Seller may not have done work as agreed; however, the work was done and the Seller saved a few bucks. Simply do a RE- inspection to confirm it’s done correctly and move forward. Then the only thing between you and some equity and cash flow is an inconsequential difference of how/who did the work. Assuming this in an investment property. You’ve got time and money into already, get that return coming your way sooner rather than later.
Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
5y
Kevin,
Most of our Insurance carriers have a problem with Aluminum wiring (similar to the way they feel about Knob & Tube). Most will not write a house with active Aluminum wiring. I would check with your agent and make sure that will not present a problem getting coverage.
Flipper/Rehabber · Memphis, TN · Member since 2020 · 758 posts · 285 votes
5y
Aluminum wiring is less expensive to copper wires. It was popular back in the days. Now a days, copper wire is preferred due to its stability (conducts better electricity) and safer compared to aluminum. Aluminum has the ability to expand when the current flows through it, thus there is a risk of house fire. Are the wirings new?
Rental Property Investor · Prairie Village, KS · Member since 2017 · 23 posts · 10 votes
5y
@Brian Sher So the Seller installed COALR outlets but has left splices of aluminum to aluminum with standard wire nuts behind several recepticals and switches. My electrician recommended replacing these with the purple wire nuts but I’ve since come to find out that they are rated for copper to aluminum connections only. My intent here is to make sure the home is up to NEC code since that’s what the city follows. I couldn’t find any specific instances where the code disallows aluminum to aluminum splices but I also want to make sure I get these right.
Developer · Waxhaw, NC · Member since 2020 · 12 posts · 13 votes
5y
NEC 110.3(B) states, "listed or labeled equipment shall be installed and used in accordance with any instructions included in the listing or labeling." aka you have to follow the instructions of every part of the electrical system.
-CO/CALR outlets are rated for for aluminum and copper terminations and are legal because of that. did they also replace switches? what about light fixture terminations?
-You are correct. AL/CU purple wire nuts are legal for aluminum to copper, copper to copper but not aluminum to aluminum (no wire nut is... that I am aware of)
-Alumiconns are legal for all splices: AL/CU, CU/CU ,and AL/AL. I would suggest these for what they left with regular wire nuts on.
-AFCI circuit breakers, like others said above, work well in conjunctions with the correct splices and terminations.This is required in my state when updating multiple devices or extending/ adding circuits, but check with your local AHJ (authority having jurisdiction) to see if its necessary. Either way it will give you piece of mind.
End result, if this was a good deal then it is most likely still a good deal. Get as much back from the seller as you can and close, then hire your guy to fix it up the rest of the way.