Columbia, MO asked in Real Estate Law for California

Q: Can Remax legal department 'demand' that we purchase a home warranty plan for the buyer? Located in LA County.

We are closing on August 12th, selling our property in LA County. Our realtor (Remax agent) informed us last night that the Remax legal department is requiring us to purchase a Home Warranty policy for the buyer as a condition to closing. Are they legally allowed to demand this? We have to pay for it, and we have never heard this as being a legal obligation before. This is not being presented as a request, but as a demand to close.

Thanks.

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2 Lawyer Answers
Joshua D. Brysk
Joshua D. Brysk
PREMIUM
Answered
  • Pleasanton, CA
  • Licensed in California

A: It is not a statutory obligation; it could be a legal obligation if it is part of the contract of sale [doubtful]. While it might not be required, many realtors advise doing this as the relative cost is a good investment to avoid future complaints. It is a bargaining point among the Sellers, Buyers and Realtors (who might even foot the bill).

Maurice Mandel II
Maurice Mandel II
Answered
  • Newport Beach, CA
  • Licensed in California

A: Since it is the Remax Legal Dept that is requiring it from you, their client, ask them to pay for the premium out of their commission. I agree with Mr. Brysk's analysis too.

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