Is Retrofit ‘Mandatory’ or Can It Be ‘Waived’?

This is a common questions we are asked all of the time – can retrofit and code compliance be waived? Others in my office do it, and why can’t I?

Well, in reality, ANYTHING in a contract can be ‘waived’. but it’s best to ask the following yourself a couple questions before mandatory code compliance and retrofit requirements are waived.

  • Does my office allow mandatory code compliance items to be waived, as they seem to be minor issues?
  • Is it in my best interest to allow the seller to not to adhere to mandatory code compliance issues where others may not?
  • Is it in my client’s (the sellers) best interest to ignore advising them of the pros and cons of waiving any mandatory retrofit or code compliance item on the RPA?
  • What are the legal consequences of waiving, or ignoring state, county or city mandates to me, my broker, or my client?

The agent does not pay for retrofit and code compliance items to be in compliance so in this respect, a retrofit inspection is a ‘free’ insurance policy for the agents and seller (or in some cases the buyer) since either the buyer or seller will pay for retrofit services, not the agents.

And in many cases, the seller, when asked, is more than happy to complete all code compliance items when selling to more cover their liability (and sometimes the liability of the estate) even though some items may seem not necessary or may seem silly.

Agents – Firstly, always check with your office broker to see what your company’s policy on ‘waiving’ any retrofit or code compliance item. Best to never ‘assume’ waiving code compliance is OK.

If ‘waiving’ certain items are OK with all parties, check with your office or escrow officer for verbiage for a waiver addenda that can be agreed upon by all parties.

Waiving ‘mandatory’ items may bring additional legal implications to you the agent or your broker, so make sure you know what you are doing – or not doing – if parties in a transaction decide to waive or ignore state, county or city mandates.

For cities without a formal city certificate, there are still some mandatory state requirements that should be addressed. Here is a list of those state mandates, which cover all properties in California.

Call us at 310-800-4418 if you have any questions about waiving any items related to retrofit and code compliance.


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