Are there any Title V exemptions for foreclosed/bank-owned homes that are sold or auctioned? It's my understanding that the property transfer cannot take place without Title V compliance so it seems that bank will end up being responsible for it if the inspection fails. Is it legal for a seller (bank or otherwise) to construct a contract or P&S Agreement that transfers the Title V responsibility to the buyer indirectly by specifying that a Title V failure is not sufficient to void the contract creating a situation where, if inspection fails and the seller refuses to fix the problem and the sale cannot be completed, the buyers deposit is lost? Note I'm considering buying a foreclosed or bank-owned property and trying to figure out the possible risks.
Submitted by Anonymous on Tue, 05/05/2009 - 23:48
Posted in
Editor's Response
MA law does provide an loophole for foreclosing institutions. See 310 CMR 15.301(3)(b). Under this regulation, a foreclosing institution can pass the requirements of Title 5 on to an “unaffiliated third party” (that would be you, the buyer at in REO re-sale). Good luck, and please tell your friends about The Forum.