Do outbuildings go with a property?
We had something happen for the first time this month that had to do with an outbuilding located at a property we had recently purchased. It was a great learning lesson, and I’d like to share it with you.
The sellers of this house where in distress. They had been relocated for work and had listed their house, but they hadn’t sold it in a timely manner. Unable to make two house payments on one salary, they had gotten behind and were in active foreclosure.
When we asked the sellers how we could help, they responded that they just wanted to get the foreclosure stopped if that was even possible. The reason they had this question was that they were only about a week out from the foreclosure auction.
I called our attorney to see if they could run a title search and close on the house in time to stop the foreclosure. He said he could, and we went under contract for a purchase price of the loan balance left on the mortgage.
We bought the house, stopped the foreclosure and got right to work on it.
A couple of weeks after the sale was complete, I got a call from the sellers asking if they could have one of the outbuildings located at the property. It was one of those smaller prefab buildings you see outside of home improvement stores. Realizing that the sellers didn’t receive much out of the sale of their house, and that the building was of little value to us, we agreed to let them have it.
When they came to get the building, however, they called and expressed displeasure that there was nothing inside it. (You see we had already disposed of any personal contents left at the property after the closing.) They even went so far as to ask us to reimburse them for those contents on the grounds that “the building was not part of the sale.”
I was taken aback, and I really didn’t know how to respond because this sort of thing had never happened to us before. I thought outbuildings were considered a fixture and that they always went with the property.
To make sure, I called my attorney and asked if my thoughts were correct. He told me that an outbuilding is not a fixture unless it was placed on a permanent foundation and that buildings without such foundations are considered personal property.
I did not know that.
That being said, he told me that his experience was that outbuildings normally remain with the property unless a written agreement has been reached otherwise.
I told him about the situation we were facing and then referenced the following section of our purchase and sale agreement:
“Seller will remove all personal property not included in this sale and deliver the subject property vacated and clean, with all trash removed at the walk-through inspection immediately preceding title transfer. If the property is accepted, it will convey in “AS IS” condition. Any personal property left at the property after title transfers will be considered abandoned property, left by the Seller, and Buyer may dispose of said property in any manner they wish.”
He said, based off that information, the fact that we gave them the building was nothing more than a nice gesture since we weren’t obligated to do so. He said the sellers should have gotten any contents that they wished to keep off of the property before the closing.
I asked him if there was anything we could add to our contract that would make things more clear. He said he liked the above verbiage, but that adding something like “any personal property, including all sheds and outbuildings, not removed by the date of closing shall become the property of the purchaser” would make things clearer.
I said that was great. With that terminology, there would no questioning if the outbuildings went with the property.
I called the sellers back and explained what the attorney said. We even went back over the contract line by line. They understood that by not removing the contents of the building by the day of closing, they had abandoned them. And that ended the situation.
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.