A Home Inspection Contingency, as it is presented in the standard Florida Realtor’s Residential Contract For Sale And Purchase, protects both the buyer and the seller. The home inspection and the buyer’s request for repairs must be completed by the date stated in the contract. If left blank, it defaults to 15 days after the contract was signed and delivered to all parties (Effective Date). If the buyer fails to send the inspection report or the request for repairs within this timeframe, the home inspection contingency is null and void, and the seller is no longer required to repair or replace anything.
In South Florida, home inspections can include an assessment of the following General Repair items: roof, structure, electrical, plumbing, pool, central air and heating systems, screens, docks, and seawalls. (A complete list is on page 6 of the contract.)
On page 3 of our standard 14-page contract, there’s a section entitled COSTS TO BE PAID BY SELLERS and includes the maximum amount of money the seller will be required to pay for the repair (General Repair Limit) of the General Repair items. If a dollar amount or percentage of the purchase price is blank, it defaults to1.5 percent of the purchase price.
Once the seller receives the request to fix or replace General Repair items, they have 10 days to proceed in one of three ways: complete the repairs, deliver an estimate of the repairs, or order a second inspection and send that report and an estimate of those repairs to the buyer. If the two reports are substantially different and the buyer and seller can’t agree, they will split the cost of a mutually-chosen third and final inspection.
If the required work costs less than the General Repair Limit, the seller will have the work completed before closing. If the estimate of required work exceeds the General Repair Limit, buyer and seller have 5 days after receiving the last estimate to do one of two things: seller can agree to exceed the General Repair Limit and make all the repairs, or the buyer can submit a list of selected repairs whose total value does not exceed the General Repair Limit. The buyer will then assume responsibility for the rest of the reported defects.
One final note: In an As-Is contract, the seller isn’t required to make any repairs, but the buyer has the right to notify the seller and cancel the contract within the stated home inspection deadline. They don’t have to produce a home inspection report and explain why they’re canceling. They don’t even have to have a home inspection.