Understanding Point-of-Sale (POS) Violations
Point-of-Sale (POS) violations are issues identified during a mandatory inspection that must be addressed before a property can be sold. These inspections are often required by local municipalities to ensure that properties meet certain safety and habitability standards. The POS report lists any violations that need to be corrected, either by the seller before the sale or by the buyer after assuming responsibility for the repairs.
Seller's Disclosure Obligations
Sellers are typically required by law to disclose any known issues with the property, including POS violations. This requirement can vary by state and locality, but failure to disclose can lead to legal consequences, including potential lawsuits for misrepresentation or concealment of pertinent facts. The seller should have informed you about the POS violations as soon as they were aware of them.
Realtor's Responsibilities
Your realtor has a fiduciary duty to act in your best interest, which includes conducting due diligence to uncover any issues that could affect the transaction. According to the National Association of Realtors' Code of Ethics, realtors must avoid concealment of pertinent facts and should not misrepresent the condition of the property. In your case, your realtor should have:
- Inquired about the POS Report: Ensured that the POS report was up-to-date and reviewed it for any violations.
- Communicated Findings: Informed you promptly about any POS violations and discussed the implications.
- Negotiated Solutions: Worked with the seller's agent to determine whether the seller would address the violations or if you would need to assume responsibility, potentially negotiating a price reduction or credit at closing to cover repair costs
Why You Found Out Late
The fact that you discovered the POS violations only five days before closing suggests a lapse in communication or oversight. This could be due to several reasons:
- Expired Report: The old POS report expired, and the seller may not have obtained a new one until recently. This delay could have been avoided with proactive follow-up from your realtor.
- Seller's Responsibility: The seller might have delayed addressing the violations or obtaining a new report, hoping to pass the responsibility to you.
- Realtor's Oversight: Your realtor may have failed to verify the status of the POS report early in the process, leading to last-minute revelations.
Steps to Take
To address the current situation and prevent similar issues in the future, consider the following steps:
1. Review the New POS Report: Examine the new POS report thoroughly to understand the scope of the violations and the estimated cost of repairs.
2. Negotiate with the Seller: Discuss with your realtor the possibility of negotiating with the seller to either fix the violations before closing or provide a credit at closing to cover the repair costs
3. Consult a Real Estate Attorney: Given the proximity to the closing date, consulting a real estate attorney may help you navigate any legal implications and ensure your interests are protected.
4. Evaluate Realtor Performance: Reflect on your realtor's performance and consider providing feedback or seeking a different realtor for future transactions if you feel your current realtor did not adequately represent your interests.
In summary, your realtor should have proactively checked the status of the POS report and communicated any issues to you well before the closing date. The late discovery of POS violations indicates a lapse in due diligence. Moving forward, ensure that all necessary inspections and reports are obtained and reviewed early to avoid last-minute surprises. Additionally, consider negotiating with the seller to address the violations or provide compensation for the required repairs.
By taking these steps, you can better protect your investment and ensure a smoother transaction process in the future.
