Adverse environmental conditions

4 Replies

Hi everyone, I am new to multi-family investing and have a due diligence question. Do you typically include a statement about knowledge of adverse conditions on the purchase agreement? For example, the seller would indicate that he/she is not aware of any adverse environmental conditions on the property during the seller's ownership. This would indicate no knowledge of adverse conditions but does not guarantee that there are no adverse conditions (that the seller is not aware of). A friend is currently investigating a property in which the seller is not comfortable with this statement (no knowledge of adverse environmental conditions) on the purchase agreement. The objection is that this is not a typical statement on the purchase agreement and the due diligence would uncover issues if they are present. This seems like a red flag to me... Thanks for sharing your thoughts.

It seems like a red flag to me too, but if it isn't a standard association of Realtors form I could see the seller's concern.  Ideally you or your agent would have access to a standard form that says basically the same thing.  In CA we have this type of form available.

Saw one of those come across recently on a deal we were working. Not sure if this is the new normal?

Thanks to all of you for your responses!!

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