How to Brave the Storm of Property Damage If You’re Already in Escrow

There’s more rain heading our way, so I’d like to share some advice adopted from the wonderful Stella Ling, Esq., Berkshire Hathaway HomeServices California Properties Attorney in case you have a property that’s in escrow during this upcoming rainstorm. 

How to best react depends on each situation. There’s no right answer when it comes to the decisions to make during a storm. The best way to find a solution is to consult with your real estate professional and determine based on the particular circumstances what to do next. This might include looking at the extent of damages and repairs, what the other party in the transaction wants to do and what your particular goals are for the transaction. 

Remember the Residential Purchase Agreement (RPA). According to the California Association of REALTORS®’ Residential Purchase Agreement (RPA), a seller must have the home in relatively the same condition as it was in at closing. If a storm has caused damages to the property so it’s not in the same condition, it’s up to the seller to fix any and all significant storm damages before close of escrow. Here’s more from Stella Lind, Esq.: “If a storm-related issue adversely affects the property, the seller must generally disclose that as a matter of fact to the buyer (see RPA paragraph 11A(4)). Upon such disclosure, the buyer may have a 5-day right to cancel, even if the buyer had previously removed all contingencies (see RPA paragraph 11G(1)).”

Storm damage isn’t anyone’s fault. There’s no controlling Mother Nature! If there’s serious damage to a property after a storm, it’s still a “no-fault” disruption that must be worked out between the parties involved in the transaction. As your real estate professional, I’ll help you navigate this situation with the buyer, including getting cost estimates for repairs, keeping the buyer informed about repairs and damages and allowing the buyer to inspect the property so we can arrive at a reasonable resolution together. Whenever I’ve dealt with these types of situations, the buyer is usually understanding as long as the seller has an action plan for fixing damages that may have occurred. 

There are several ways to solve this problem. A seller can repair the damages before closing or they can give the buyer a credit or concession for future repairs. As Stella Ling points out, a Request for Repair (RR) form can be used in this scenario. “Opting for a seller credit means we will sidestep any disagreements or delays that may arise when a seller undertakes to do repairs before close of escrow,” Ling explains.

There are also several ways to solve the problem that come with greater risk. In this case, I’d say it’s NOT greater risk, greater reward. Some buyers may opt for riskier solutions, like withholding seller’s funds in escrow or requiring the seller to do repairs after closing. I usually don’t recommend either of these approaches and often, it involves letting my clients know that they should consult with their attorney to review a contractual amendment for this situation after closing. This contract can potentially protect them from liability, though it’s a much safer approach to complete repairs before closing or include a seller credit. 

No matter what this storm brings for you or your property in escrow, you can take refuge in knowing we will get through it together!

Andrew Manning • REALTOR® • Berkshire Hathaway HomeServices California Properties • DRE: 00941825 • 818-380-2147 •