By: Gary Isom
Arkansas Real Estate Commission
Two years ago, I walked in to find my dear mom tuned into an episode of Judge Judy. Now, this is probably the only episode of Judge Judy that I watched during that entire year. And, wouldn’t you know it? Judge Judy had a tenant and landlord before her arguing over the terms of their lease agreement. I guess it’s just my fate to be constantly observing a dispute involving real estate.
I watched in amazement as Judge Judy managed to say with a few words and a gesture of her hands what I’ve been writing and speaking about in length for most of my career. Repeatedly, the landlord would start to make a statement referring to some “understanding” he and his opposing tenant had about the terms of their lease agreement. Each and every time the landlord began to speak, Judge Judy would cut him off mid-sentence. She would hold up the one-page lease agreement with one hand while gesturing in a circular motion around the single page with the other hand. Judge Judy would then exclaim, “Sir– sir– if it’s not between the edges of this piece of paper, it does not exist.”
To begin, I’ll simply say I absolutely agree with Judge Judy. However, as usual, I simply cannot stop there. We must follow up by giving some examples.
Consider you’re looking at a home to buy. If you want that 25 cubic foot designer refrigerator to stay, put it in the sales contract. I’ve heard at least one real estate instructor go so far as to advise their students to include the refrigerator’s serial number. An agent recently shared an experience with me involving refrigerators. That’s right. I said “refrigerators”, as in the plural sense. The agent showed a house to a buyer. There was a refrigerator in the kitchen that was obviously selected specifically for the finish and size needed for that particular kitchen. A second refrigerator was located in the garage. The language in the sales contract stated that “the refrigerator” was included in the sale. I’m sure you can see where this is going. After closing, the buyer walked into the kitchen to find the refrigerator that had previously been sitting in the garage was now in the kitchen. One can easily assume the designer refrigerator was on a flat-bed truck, well on its way to the seller’s new home.
Of course, most persons who have shared home buying stories with friends have heard about someone’s experience of having that beautiful expensive antique chandelier, light fixture, ceiling fan, etc., that they thought came with the house being replaced by the latest blue light special from a scratch ‘n dent sale. The bottom line here is simple: if it’s important to you, spell it out in the contract.
The very same principle can apply to sellers as well. If, as a seller, you haven’t had a chance to remove the precious family heirloom that is mounted to the wall with screws, make sure the sales contract stipulates that it is not included in the sale. However, the seller is well-advised to remove anything of this nature that you do not intend to include in the sale in advance of having your property shown.
Another example of something that should be specified in the contract is the usage of the property. If a buyer owns goats, chickens, horses and llamas, the buyer should insist that the contract stipulate that they will agree to purchase the property only if it meets their intended use. In that stipulation, the buyer should detail that they will be allowed to keep all the livestock on the property, including the number of animals that will be allowed. If the city ordinance only allows 15 chickens and the buyer has 18 chickens, someone’s going to have an unsavory decision to make.
As you can see, the real estate contract trumps the advertisement. It really doesn’t matter what was advertised as included in the property. If it’s not in the sales contract, then it’s probably not in the sale.
No matter how many different examples we give, in a real estate transaction, it all comes down to Judge Judy’s one simple point. If it’s not between the edges of the paper on which the contract is written, it just doesn’t matter.