The interpretation of Paragraph 7 of the local real estate contract came up recently with a buyer client. I'm sure my client isn't the only buyer to wonder about definitions for this paragraph so I thought it would make a good blog post.

Here is the language of the contract:

Purchaser accepts the Property in the condition as of the Contract Date except as otherwise provided herein. Seller warrants that, except as otherwise provided, the existing appliances, heating, cooling, plumbing, electrical systems and equipment, and smoke and heat detectors (as required), will be in normal working order as of the Possession Date. Seller will deliver the Property in substantially the same condition as on the Contract Date and broom clean with all trash and debris removed. Purchaser and Seller will not hold the Broker liable for any breach of this paragraph. Seller will have all utilities in service through Settlement or as otherwise agreed.

The phrase in question is "normal working order".

This phrase is, unfortunately, open to interpretation. For example, when you bought your oven, it was calibrated at the factory so that when you turned the dial to 350 degrees, that's exactly what temperature you got. However, as your oven has aged, there's a pretty good chance that there's been some slippage. 350 degrees may now mean 360 degrees. Should "normal working order" mean that it must heat at exactly the precise temperature it did when new?

Typically, this phrase has been taken to mean, if it's working at the same level as it was on the contract date, that's good enough. That's barring any negotiation on this point in the home inspection.

My client questioned whether "normal working order" shouldn't really mean "to current code". And it definitely is not interpreted in that way. If the home was built in 1940 there is no requirement that it meet current code. Although, renovations/additions must have met the code at the time they were built.

As with all contracts in Virginia, remember that this is very much a "buyer beware" commonwealth. Do all your due diligence and take it seriously. When you get to the settlement table it's too late!