Someone must have royally annoyed Mother Nature because winter arrived early this year in Wisconsin. Winter tends to add an additional layer of considerations for real estate licensees working to sell properties.
Snow and ice removal
The first “layer” to consider is that layer of snow or ice periodically covering the driveways and sidewalks of properties for sale. Lines 174-182 of the WB-1 Residential Listing Contract (WB-1) gives the seller the responsibility of keeping the property safely accessible to the listing firm, other brokers and potential buyers. If the seller is not available to keep the walkways and driveway clear of snow and ice, the seller can make arrangements for this service. If the broker offers to engage a third party for this service, the broker should obtain documentation stating the seller accepts responsibility to pay for the service.
The listing agent may wish to address the snow and ice removal arrangements in the listing contract or an amendment thereto. The amendment might include the names and contact information of possible service provider(s), a statement indicating the seller directs the broker to engage the service provider, and the seller’s agreement to compensate the provider and reimburse the listing firm for any out-of-pocket costs incurred if unexpected issues arise. When contacting a service provider, the broker may use a service request form to assure the service provider will seek compensation from the seller and not the broker. The May 2004 Legal Update, “Avoiding Liability When Signing and Making Referrals,” at www.wra.org/LU0405 contains a sample Service Request form and an Authorization and Release from Liability form.
Once an offer is accepted, the seller’s obligation becomes less clear. For instance, consider the scenario where the buyer goes to move in and only half the driveway is cleared or it had snowed a few inches the night before. The Occupancy provision of the WB-11 Residential Offer to Purchase states that at the time of closing, the property shall be in broom-swept condition and free of all debris. The seller also agrees to “maintain” the property in materially the same condition as of the date of the offer. Whether or not these provisions can be applied to snow removal might be questionable. With regard to sidewalks, there may be municipal ordinance requirements for snow and ice removal, which would be the seller’s responsibility until closing unless otherwise agreed.
Winterize and dewinterize
Another concern in the winter is whether a property is vacant and has been winterized. This may mean utility services such as electricity or water have been turned off. Before the power is turned off, the property must be winterized to avoid freezing and breaking pipes. Any liquids that could freeze should be removed. The owner should also consider that sump pumps don’t pump and fans for radon mitigation systems don’t run when the power is off. In a related concern, some distant asset managers do not realize the effects of freezing temperatures and Wisconsin winters on vacant REO properties.
The fact these owners are turning off unneeded utility service and conserving energy is commendable, but this may present a problem if the property is for sale and the inspectors need to have the utilities on in order to conduct proper inspections or testing. And home inspectors will not ordinarily turn on water or other utilities.
Unfortunately, the standard home inspection contingency in the WB-11 Residential Offer to Purchase does not address the obligation to winterize and/or dewinterize the property or refer to winterized properties. This creates a question as to who is responsible to turn on the power or other utilities for the inspectors, who will turn them back off once the inspections are completed and who will pay for these actions; in addition, who will be responsible for any damage that occurs during the period when the power and water are on is another question to consider.
If the buyer knows the property is winterized, the buyer may discuss the winterization with the home inspector before the offer is written to find out exactly what the home inspector will need and on what schedule. In this regard, it would also be helpful if the seller shared the fact that the property is winterized, perhaps in private remarks in the MLS. The buyer can then draft the offer to specifically address the timing, responsibility, costs and liability for dewinterization and rewinterization. This will avoid later arguments and confusion.
If the parties cannot resolve this issue, they may need to enlist the services of legal counsel. See “The Best of the Legal Hotline: The Accidental Property Manager, Take 2” in the January 2011 Wisconsin Real Estate Magazine at www.wra.org/WREM/Jan11/Hotline.
Sometimes the seller asks the listing agent to hire contractors to winterize the property. At a minimum, the agent should have a written work order that identifies the listing agent as an agent of the owner, indicates that the work is being done on behalf of the owner, and emphasizes that all billings are the responsibility of the owner and should be put in the owner’s name. Information regarding the contractor’s insurance and bonding should be provided to the owner. Preferably the owner, and not the listing agent, will select the contractor to avoid later claims that the agent was negligent in the hiring of the contractor. The May 2004 Legal Update, “Avoiding Liability When Signing and Making Referrals,” available at www.wra.org/LU0405 contains a sample Service Request form and an Authorization and Release from Liability form.
Ice dams
One issue that may turn up during home inspections in the winter is evidence of ice damming on the roof. Oftentimes different contractors may have different answers about the “best” method to correct the issue.
In an inspection contingency scenario, the notice of defects is a unilateral statement whereby the buyer gives the seller notice of the defects to which the buyer objects. It cannot be used to dictate how the seller cures the defects, if the seller does cure. If the buyer has researched contractor proposals and wishes to have ice dam defects cured other than simply in a “good and workmanlike manner,” that standard should be stated in the offer or in an amendment. Both parties must agree in an amendment to the standards, materials, contractors, methodology and other details if the buyer is looking for that “best” method to correct the issue.
Landlord/tenant notes
Winter evictions
In Wisconsin, there is no statutory or administrative code provision preventing a landlord from evicting a tenant in the winter months. The parties may review local ordinances and the rental agreement to determine if either places any limitations on the owner’s ability to terminate the tenancy.
Landlord-supplied heat
Wis. Admin. Code § ATCP 134.04 states that a minimum inside temperature of 67° F (19° C) is required during all seasons of the year in which the dwelling unit may be occupied. This is required for all living areas. Temperatures in living areas shall be measured at the approximate center of the room, midway between floor and ceiling. While the outside temperature will obviously have an effect on the inside temperature, the rule only applies to the internal temperature, and thus applies regardless of the season or the weather outside.
Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.