Hey all,
So some of you have seen my other threads about my in-laws' restaurant business selling. They agreed, against our advice, to allow the new potential business owner to fully take over operations (and thus collect the income) before the close of escrow. Part of the reasoning is because the ABC liquor license has been taking a while to close out and they didn't want to risk the buyer walking away (which the broker agent, who serves as both the broker for my in-laws AND the buyer, implied could happen... if that's not already enough of a conflict of interest). Anyway, the new owner started on 1/21 with my in-laws hanging around to help out and train where needed. The kitchen refrigerator motor went out and she had to pay $220 to get it repaired. She initially paid to get it fixed immediately. Then she went to the broker to complain about it. Right now the broker seems to be suggesting that my in-laws pay for the repair - he reminded that in the purchase agreement, there's a clause (which he and I think the buyer added) that states "All restaurant equipments, computer systems and applications, heating, A/C, plumbing, electrical systems are in good working order and repair." with no certain timeframe specified; the broker stated it's "normally 30 days" for things like this. We are concerned, on behalf of my in-laws, that more things will break and that she will start racking up a list of bills to provide the broker to hold against them.
So should my parents be paying in full for this and potentially for other future repairs that are incurred during this time?
Like I said, we advised against them handing off operations before closing but they insisted. They also went against our advice to retain proper legal counsel to review the purchase agreement and all other key documents. But my wife is the one who is having to deal with whatever outcome(s) is dealt.