It Was Almost Lights Out for This Exchange.

Attorney Sarah Carol of Larchmont, New York, relayed this story from one of her recent closings:

I was representing a purchaser on the second leg of his exchange. He had previously sold a 10-unit apartment building and he was purchasing a 25-unit apartment building with the funds he had in his 1031 account.

When my client walked into the closing room I could tell by the look on his face that I was in for a long afternoon. There had been “bad blood” between the purchaser and seller since the day of the contract signing. Arguments about tenants, missing screens and cracked tiles had gone on for weeks.

But even as a battle-scarred attorney, I was surprised at the level of animosity that had come between the parties when my client explained the reason for his dour expression. My client told me that he had just conducted the final walk-through inspection and everything was fine but for one noteworthy exception: The seller had removed all of the light bulbs from the building.  By “all of the light bulbs” I mean the refrigerator bulbs, the oven bulbs and bulbs in the Exit signs! When the seller and her counsel were confronted, the seller said that she had read the contract and it stated that she was conveying “all light fixtures and appliances on the premises,” but the contract was silent as to light bulbs.

The next several minutes were very loud and contained many words that you usually do not hear at the closing table. When my client became fed up and began to walk out the door of the title company, the seller came to her senses and offered to replace the light bulbs. It also helped that her attorney advised her that a judge would fail to see the logic or humor in her position. She said that the light bulbs were in her pickup truck in the parking lot and she offered to bring them back to the building. When my client found out that the number of light bulbs that needed to be screwed back into the sockets was 287, he held his ground until the seller agreed to reinstall the light bulbs.

We had to move the closing to the next afternoon – which happened to be the 180th and final day of the purchaser’s exchange period. After one more walk-through inspection, which involved opening 25 refrigerators and 25 oven doors and flicking numerous light switches, the deal closed. And the ironic part of the story? The seller did not attend the closing. Her attorney explained that replacing the light bulbs had given her a migraine and she was lying in bed with a cold compress-with the lights shut off.