15/4/2015 0 Comments
The latest revisions for Residential Contract for Sale and Purchase were enacted in August 2013. There were several changes made at that time. The following is a list of the changes made to each section. Only sections with changes are covered below:
I. Residential Contract for Sale & Purchase
1(d) Personal Property – The subparagraph had a number of checkboxes that have now been removed. Three of the items from this list, specifically smoke detectors, refrigerator(s), and storm shutters, are now on the Sellers’s preprinted list of owned items to be included in purchase if they exist on the property at the time of the initial offer. Blank lines can now be found in Paragraph 1(d) and 1(e) for any other personal property to be excluded or included in the purchase.
2(a) Initial Deposit – Removed a checkbox for deposits made at the time of acceptance. Instead, there is now a default of requiring the initial deposit within 3 days of the Effective Date if neither of the other check boxes are selected.
2(b) Additional Deposit – The default time for additional deposits to be made by the buyer has been extended from three to ten days.
3(b) Effective Date – The way the Effective Date is calculated has been changed. It is now determined by the date the last party signs and delivers the offer, not just signs it.
6(b) Occupancy and Possession – Check boxes have been added if tenants or occupants exist with future leases on the property being sold. The buyer is obligated to receive any such leases within 5 days of the Effective Date and has the right to terminate the contract within 5 days of receiving the lease if they find them unacceptable. This is a change from the 5 days after the Inspection Period previously allotted to review leases.
8(b) Financing – New check box has been added for “other” with a line to fill in how the buyer will get a loan if it’s a non-conventional method. This now allows buyers to insert something like FHA 203K or USDA where they previously could not. Additionally, a blank line for the loan amount has been replaced by a term Loan Amount stipulated in 2(c). This means that only Paragraph 2(c) need me modified if changes to the Loan amount occur during negotiations, streamlining the process. A 30 year default was also added for loan repayment if this line is left blank.
Additional changes were made to the wordings of when Loan Commitments must be obtained by. Buyers are now obligated to give written notification to the Seller upon securing a Loan Commitment. There are certain conditions under which either party may cancel the contract if the buyer is unable to secure this Loan Commitment in a timely manner.
· Cancellation can occur at any time prior to either (1) 7 days prior to closing; or (2) the buyer providing written notification to the seller of a Loan Commitment (or if they choose to waive Financing).
· If neither party terminates the contract in a timely manner, the financing contingency of the contract is simply waived.
9(b) Costs Paid By the Buyer – The Policy Premium of the Owner has been added to the buyer’s costs in the event that the Miami-Dade/Bower Provision check box is marked. The policy premium has always been included in the buyer’s cost in 9(c) (iii), but not in 9(b) until this latest revision.
9(c) Title Evidence & Insurance – The Owner’s Policy and Charges now includes municipal lien search. How it works is whichever party is responsible for the title costs in 9(c) (i) or 9(c) (ii) is also responsible for the municipal lien search cost.
10(d) Food Zone – There is now a blank line where an amount of time the buyer will be given to terminate the contract if it is determined the property cannot be insured for flood protection by the National Flood Insurance Program (NFIP) or if the elevation of the lowest floor is below minimum flood elevation. Previously this was stipulated as 20 days. This is now the default if this line is left blank.
10(i) FIRPTA Tax Withholding – Any seller who is a foreign person must provide the buyer written notice of this information for FIRPTA. Sellers may also provide certification of non-foreign status as well. A new STANDARD V is reference which has specific FIRPTA requirements which parties many wish to seek legal counsel on.
12 (b)(i) General Inspection – Sellers can now submit a written request for the inspector report for any item the buyer asks them to repair.
12(b)(iii) General Property Repairs; 12(c)(i) WDO Repairs; 12(d)(ii) Closeout of Building Permits – For all these sections, the time frame for the Seller to get an estimate of the costs for requested repairs has been lengthened from 5 to 10 days.
STANDARD D – Lease Information – Revised along with Paragraph 6 covered above to lengthen the time from 5 to 10 days prior to closing for Estoppel Letters or Affidavits to be presented to the buyer. If there is there are significant differences between the information the buyer obtains pursuant with Standard D and that provided in Paragraph 6(b), they buyer may terminate within the allotted time.
STANDARD F – TIME – Revisions here were made to help clarify when time extends until the next business day. Dates will now extend to the next business day if they fall on a national legal holiday or on Saturday or Sunday. There are two exclusions to this: (a) The Effective Date; and (b) The Time for Acceptance.
STANDARD O – Contract Not Recordable, Etc. – Delivery & Contract Execution were added to this STANDARD’s caption. These words were added to reflect instances where clarification was needed.
STANDARD I – Closing Documents – The reference to the seller’s obligation to pay for documents covered in Paragraph 9 was deleted.
STANDARD T – Loan Commitment – The Loan Commitment definition for this contract has been amended to specifically omit both prequalification and pre approval letters.
STANDARD V – FIRPTA – This is a new section to the Standards. It covers parties obligations as pertaining to the Internal Revenue Code Section 1445. This Standard has replaced the FIRPTA rider, or Rider I. Now, Rider I, when referenced in Paragraph 19 is referred to as RESERVED. There are several details of what specifically is in this new Standard that you should review with a qualified Real Estate Attorney should you want to know more.
19 – Addenda – Rider A’s name was changed to Condo Rider from Condo Assn. Rider P is also renamed (Lead Based Paint Disclosure). The Rider I reference is now marked RESERVED as discussed in STANDARD V changes.
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