When buying a residence, most home buyers understand the benefit to hiring an independent home inspector to inspect the property. When using the standard form offer to purchase in Wisconsin (WB-11 or WB-14), the buyer typically includes an inspection contingency. One of the decisions the buyer must make in completing this form is whether to provide the seller with "the right to cure." (Note: there are alternatives which can be written into any particular contract. Your attorney can craft particular language which completely changes the way the inspection process will work. This discussion relates solely to the unmodified form offer to purchase).
My recommendation to buyers invariably is that they should not provide the right to cure. Why not? Shouldn't a seller have a fair opportunity to fix problems with the property?
In order to understand my recommendation, one must understand both the form language and the practice of buyers and sellers which is not included in the form. As to the form language, the standard offer inspection contingency states:
This Offer is contingent upon a Wisconsin registered home inspector performing a home inspection of the Property which discloses no Defects.The offer then provides a timeframe within which the buyer must deliver notice of any defects. Otherwise, the contingency is satisfied merely by the deadline passing. In a case in which the buyer serves notice of defects, what happens next is governed by whether the seller has the right to cure. If the seller has the right to cure, the seller can elect to kill the deal or the seller can elect to cure the defects. If the seller does not have the right to cure, the buyer elects to kill the deal by serving the notice.
In case either party has elected to kill the deal, the deal may not be dead. Obviously the parties are free to renegotiate a new offer.
In the case where the seller has the right to cure and elects to cure, the seller is supposed to cure the defect in a good and workmanlike manner and then deliver to the buyer a written report detailing the work done within 3 days prior to closing. Note that the buyer has no input into how the defect is cured.
What is the practice of buyers and sellers after the inspection? The vast majority of the time, when the inspection reveals "issues," (note I did not say "defects," because we don't necessarily have to determine whether the issues arise to the level of a defect in most cases), the buyer proposes an amendment as to how to resolve the issues. The seller either agrees or proposes an alternative. And back and forth until the buyer and the seller agree on how to resolve the issues. Then, the parties execute an amendment. Neither the notice of defect nor the right to cure are specifically implicated.
TYPICALLY, IT IS ONLY WHEN THE BUYER AND THE SELLER DO NOT AGREE ON THE CURE THAT THE NOTICE OF DEFECT IS ACTIVATED. Given this understanding, it should be obvious why the Buyer does not want to give the Seller the right to cure. Whatever the Seller is proposing as the cure must be unacceptable to the Buyer, otherwise the parties will simply execute an amendment. When the Seller's proposed cure is not satisfactory to the Buyer, the Buyer does NOT want the Seller to have the right to force an unacceptable cure.
For this reason, Buyer clients typically are advised NOT to give the seller the right to cure. A buyer should not be forced to purchase a property after discovering a defect that will be addressed in an unsatisfactory manner.
