This post comes on the heels of a windstorm, the likes of which we haven’t seen in quite some time. The weather does not care what plans we have for selling and buying homes, conducting inspections or performing closings.
There were likely any number of home inspections planned around the Northern Virginia region that were impacted by the windstorm. Certainly, the storm knocked out electricity to tens of thousands of homes thereby preventing a home inspection. The standard Home Inspection Contingency Addendum used in the Northern Virginia market contains language that addresses the situation in which utilities are not in service. Specifically, the language reads in relevant part:
“Pursuant to the terms of this Contract, the Seller will have all utilities in service. If, for any reason, the utilities are not in service, Home Inspection Deadline will be extended until 9 p.m. ____ days after Buyer receives Notice from Seller that all utilities are in service.”
The deadline for the home inspection contingency is extended in the event utilities are not in service based on when buyer receives notice from the seller that utilities are back in service. The number of days the deadline is extended is determined by the parties at contact ratification. For example, assuming the parties agree on 5 days (which would be inserted in the blank line above), then on a 14 day contingency period, if utilities are not in service on the 11th day and the seller provides notice to the buyer on the 12th day that the utilities are back in service, the buyer would have until the 17th day, measured from contract ratification, to conduct the inspection. Thus, the buyer gets an extra 3 days from the original home inspection contingency deadline. This language serves as a contractual safeguard to allow the buyer the time to conduct important due diligence.
Now for the twist. Let’s assume a 14 day home inspection contingency. However, a windstorm strikes and knocks out power on the 2nd day of the contingency period. On the 4th day, the seller delivers notice that the utilities are back in service. Assuming the same 5 days as above, does the buyer now have until the 9th day from date of ratification to perform their home inspection, thus shortening their contingency period from 14 to 9 days? This seems like an absurd result, and indeed it is. To conclude that the Buyer has their full 14 day home inspection contingency under this scenario, the language of the relevant home inspection provision is instructive. Specifically, where the utilities are not in service, the language intends that the “Home Inspection Deadline will be extended until . . . .” This flies in the face of a possible shortening of the home inspection contingency deadline. Further, it simply doesn’t make sense that some unilateral intervening event, whether an act of God or Seller caused, should shorten a buyer home inspection contingency period.
As is often the case, the standard contract used in Northern Virginia answers many questions for us as we navigate our way toward successful real estate settlements.