Why Due Diligence Addendum SCR311 is Good for Sellers and Buyers

Sellers get paid the SCR311 due diligence termination fee when the buyers timely/properly terminate under due diligence.

Sellers avoid litigation and lawyers and experts and mediation that can cost the sellers time and money with the first failed deal and that failed deal’s lawsuits can create problems with the second deal.

SCR310 Section 3 Property requires the seller to maintain the property in an operable condition though closing.

SCR310 Section 15 covers what happens when damage to the Property occurs during the time between contract and closing.

SCR525 addresses repair and repair re-inspection and notification and cure time frames.

SCR310 repair procedure arguments are solved by:

1. the parties (Parties decide to hire lawyer or not after REALTOR® recommends obtain legal counsel per ethics Article 13)

2. or the parties using a mediator

3. or a judge

Because no one has taken repair procedure issues all the way to the SC Court of Appeals and or SC Supreme Court, there is no controlling precedent, which means the trial judge makes the decision.

Because repair issues are almost always different for different home re-sales, it would be unusual that even the one case that got to the SC Court of Appeals would match the present case which means the trial judge makes the decision.

So how does the trial judge make a decision upon repair procedure issues?

During a full and fair hearing which can take a lot of the sellers’ and buyers’ time and money to prepare for and achieve, the trial judge will listen to and read the statements and testimony and expert opinions and documents entered into evidence. Then, the trial judge will issue a ruling.

The sellers’ lawyer will hire expert witnesses.

The buyers’ lawyer will hire expert witnesses.

Expert witnesses will evaluate the issues and prepare opinions and testify to issues such as:

Are the improvements structurally sound?

Have the environmental issues been addressed?

Have the heating systems, air conditioning systems, electrical systems, plumbing systems, water supply systems, waste water systems been put in operative condition for conveyance?

Is the roof free of leaks?

Judge decides the answer to these questions.

Under due diligence, no need for lawyers and no need for expert witnesses and no need for long wait for court and no money to get prepared for court and no court worries and no placing the decision in the judge’s hands. Parties either work out a deal or terminate and move on to other deals in a timely/proper manner.

It is impossible to anticipate all the nuanced fact patterns that occur in the tens of thousands of real estate transactions in SC, so the forms have to be broad enough to handle all these issues and allow a framework for a judge to make a decision when the parties cannot work out a solution.

REALTOR® associations provide mediator lists so the parties can hire mediators to help the parties work out a settlement.

If the parties cannot work out a settlement and have not used due diligence, then the parties might hire lawyers and go to court for a solution.

Posted by : Byron King on 8/20/18 (This information is only accurate as of 8/20/18. You must contact SCR for updates and changes to this information after 8/20/18 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)