Is the home seller responsible if the HVAC breaks down before closing?

In this example, a home buyer discovered during their final walk-through that the HVAC system wasn’t working properly. After inspection, it looks like it will take $6,000 to repair.

The buyer is demanding a refund of their $10,000 Due Diligence Fee, Earnest Money Deposit, AND Due Diligence Costs (inspection,appraisal, etc.) based on the seller’s breach of the contract for failing to keep the property in the same condition as it was on the date of the offer.

In this instance, if the seller doesn’t make the repairs, the buyer is entitled to get their due diligence fee and earnest money deposit back, but not the due diligence costs.

Paragraph 11 of offer to purchase form 2-T addresses this. The seller is not in breach of contract, but paragraph 11 gives the buyer the right to terminate the contract and get their due diligence fee and earnest money deposit back, but not the due diligence costs.

If the Buyer does NOT elect to terminate this Contract the buyer would have the right to the proceeds of any insurance claim filed by Seller on account of any damage or destruction to the Property.

Lastly, if the seller wants the deal to go through, they have to be given the opportunity to repair the HVAC unit, and if they do, the buyer couldn’t terminate the contract without losing their deposits