Q: I am representing a seller in escrow. The buyers’ home is closing several days before the close of this transaction. The buyers’ agent is asking if the buyers can store their furniture in seller’s garage pending the close of escrow. It is a large two-car garage and can hold all of buyers’ possessions from the much smaller home they are selling. My seller is willing to accommodate them, but I am worried about potential liability if buyers’ possessions are damaged, or if seller’s home is damaged as a result. How can I protect my seller?
A: You are right to be concerned. There are a number of potential liability issues here. Seller’s home could be damaged when buyers’ possessions are being moved into the property. Buyers could discover damage to their possessions and blame seller or the agents. A mover could be injured moving buyers’ possessions and blame seller, etc.
PRACTICE TIPS
- Both sellers and buyers should be advised in writing to consult with their qualified California real estate attorney regarding potential liability issues.
- The parties should also be advised to consult with their own insurance representative to ensure that they have insurance coverage.
- The attached Amendment form can be used for this purpose.
How to use this Amendment form: This is an amendment to the Purchase Agreement. It is an optional form but strongly recommended if buyer is to store personal property prior to the close of escrow. There is no comparable CAR form at this time.
Do not forward to Sellers or Buyers: This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2018 2/16/18
FORM FOLLOWS:
PRE-CLOSE OF ESCROW PERSONAL PROPERTY STORAGE AMENDMENT
This is an Amendment to the Real Estate Purchase Agreement (the “Purchase Contract”) dated ____________, 201___ for the property commonly known as __________________________________________________________ between __________________________________________, Buyer, and _____________________________________, Seller (collectively “Parties).
In most real estate transactions, the Buyer does not store any of their personal property at the Seller’s Property prior to Close of Escrow, and Broker strongly recommends against Buyer and Seller proceeding with any effort to store any of the Buyer’s personal property at the Property. Prior to the Buyer or the Buyer’s representative undertaking to store any of Buyer’s personal belongings at the Property, the Parties understand, acknowledge and agree that:
- If the escrow fails to close for any reason, Buyer will assume full responsibility for the removal of Buyer’s personal property from the Property within three (3) or _____ Days of receiving written notice from Seller to remove the items and to do so without interfering with Seller’s use and enjoyment of the Property and without harming the Property;
- Buyer agrees to take all reasonable steps to safeguard Buyer’s personal property and agrees to hold Seller and Broker harmless from any and all loss or damage to Buyer’s personal property or from any loss or damage to Seller’s real or personal property caused by or arising from Buyer storing these items at the Property;
- The Buyer shall provide proof of liability, hazard and theft insurance to Seller prior to storing any personal property at the Property which names both Buyer and Seller;
- The specific items to be stored at the Property are limited to the following: ____________________________ _____________________________________________ . No other items are to be stored at the Property without first securing written authorization of Seller and will be subject to all of the terms and conditions in this Amendment. No flammable or explosive materials may be stored without specific written permission from Seller;
- The part(s) of the Property that Buyer is authorized to use for the storage of the items detailed in Paragraph 4 are limited to: ______________________________________________________________ and Buyer shall not have the right to use any other part(s) of the Property for any purpose;
- The authorization to store the items detailed in Paragraph 4 does not constitute a change of possession, nor grant Buyer any right to take possession of the Property for any other purpose than what is allowed under this Amendment;
- The obligations of Buyer as specified in this Amendment shall remain in full force and effect even if the Purchase Agreement by and between the Parties is terminated for any reason.
Broker has not and will not supervise the moving, storage, safeguarding or removal of these items, and the Parties agree to hold Broker harmless for any liability or harm which results from the Parties proceeding with this Amendment.
Broker strongly recommends that both Buyer and Seller discuss this matter with their own qualified California real estate attorneys and insurance advisors prior to signing this Amendment. Broker also recommends that the moving and storage of the Buyer’s personal property items be handled by qualified, licensed professionals.
Seller: ____________________________________ Date: _________________________
Seller: ____________________________________ Date: _________________________
Buyer: ____________________________________ Date: _________________________
Buyer: ____________________________________ Date: _________________________