I'm selling my HVAC company and we're in the final stages of due diligence. The buyer's lawyer flagged that the transfer list didn't mention the 800-gallon propane tank on the property. It's buried and was installed by the previous owner 20 years ago. Now the buyer wants a $15k credit and my partner is furious because he thinks it's no big deal. Has anyone dealt with a tiny asset causing a massive blowup? I'm worried this is going to derail the whole deal.
Asset Transfer
Why missing one asset on the transfer list can cause huge fights
buried propane tank? that's not tiny. that's a liability waiting to explode. buyer is right to be spooked.
I sold a landscaping business last year and forgot to list the trailer. Buyer dind't care. But a propane tank? That's different. Environmental regs, potential leaks... yeah, I'd want a credit too.
Your partner is the problem here. 'No big deal' is how you end up in litigation two years post-close because the tank was leaking into the water table. Tell him to take the credit and move on.
That's what I'm saying. But he's dug in. He thinks the buyer is nickel-and-diming us after already agreeing to a decent price. I'm stuck in the middle.
Lol @ nickel-and-diming. A buried tank can cost way more than 15k to remove if it fails inspection. Your partner needs a reality check.
This is why you do a thorough asset schedule from day one. Missing one item opens the door for the buyer to renegotiate everything. It's not about the tank anymore; it's about trust.
Honestly, 15k credit on a HVAC business sale sounds like a bargain. I'd sign that before the buyer changes their mind.
Also, who installs a buried propane tank and doesn't keep records? That's just asking for trouble. Your partner probably wants to keep the tank for himself.
I once had a client forget to transfer the domain name for the business website. Buyer walked. So yeah, tiny asset, huge fight. You're not alone.
Thanks, everyone. I'm going to push for accepting the credit. Appreciate the sanity check.
Good luck. And maybe Double-check the rest of the transfer list. Who knows what else is buried back there.