Under OREF 001 Section 6: Who Pays the Appraisal Reinspection Fee for Missing Water Heater Straps?

Q: Under Section 6 of OREF 001—Residential Real Estate Sale Agreement, sellers must pay appraisal reinspection fees only if their breach causes the need for an appraisal reinspection. If the seller agreed to install water heater straps during repair negotiations and the appraiser flagged them as missing before the repair deadline passed, is the seller required to pay the reinspection fee?

A: Under Section 32.1 of OREF 001 – Residential Real Estate Sale Agreement, a seller is only in default if they fail to fulfill a material term of the agreement. If the agreement requires installing water heater straps by a specific deadline and that deadline hasn’t passed, then the seller wouldn’t be in breach or responsible for reimbursing the reinspection fee. It’s important for the parties to consider how different sections of the sale agreement can affect one another. For example, the default timeline for updating and installing working smoke and carbon monoxide detectors per Section 25 of the Agreement is ten business days from the Effective Date. This is something usually identified by a home inspector during the home inspection period, which also defaults to ten business days. But if the home inspection period is shortened in the offer, the timeline for updating the smoke and carbon monoxide detectors should also be shortened to ensure it’s completed before the appraisal is done to avoid an appraisal reinspection fee.

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