Question: Three months ago, we sold a small office building in midtown Phoenix. During the escrow period, the buyer hired a building inspector. We gave permission to the inspector to inspect the building, including the flooding of the roof to determine if there were any roof leaks. There was no problem with the roof. We have now received a letter from the buyer’s attorney saying that the roof is leaking and that the cost to repair the roof will be $8,000. We never had any problems with the roof. Does the buyer have a claim against us for the roof repairs of $8,000?
Answer: No. Unless a seller of an office building or other real property has knowledge of a material defect such as a leaky roof, a seller generally has no liability for the cost of any repairs after the closing of the transaction. Therefore, even if the buyer had not conducted an inspection of the roof before close of escrow, you should have no liability to the buyer.
Note: If a seller makes repairs on a leaky roof during their ownership, or knows of roof repairs from a previous owner, the seller must generally disclose these repairs. This is the case even if the repairs have completely fixed any roof leaks. A seller’s failure to disclose known roof repairs is one of the most common seller disclosure mistakes.