Humber/Ontario Real Estate Course 2 Exam Practice

A representation and warranty clause concerning water damage states that there should be no water seepage in the basement at completion. What is incorrect about this clause?

1. This clause is correctly worded.

2. The clause incorrectly suggests that the seller will warranty the basement areas beyond the closing date.

3. A representation/warranty clause is the only way to handle this buyer concern.

4. The salesperson should have drafted an acknowledgement clause instead.

The correct answer is: The clause incorrectly suggests that the seller will warranty the basement areas beyond the closing date.

The clause incorrectly suggesting that the seller will warranty the basement areas beyond the closing date is the issue with this representation and warranty clause concerning water damage. This implies that the seller would be responsible for any water seepage in the basement that occurs after the completion/closing date, which is not typically part of the seller's obligations post-closing. This could potentially lead to disputes and confusion regarding the scope of the seller's responsibilities.