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Residential Contract for Sale and Purchase

Residential Contract for Sale and Purchase. Summary of new Provisions-7/13 Presented by: Marcia Tabak. Access to forms: After connecting to the hotel wireless, Do this: 1 - go to FloridaRealtors.org 2 -Click on “Legal Center” on the left 3- Click on “Hot Topics”.

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Residential Contract for Sale and Purchase

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  1. Residential Contract for Sale and Purchase Summary of new Provisions-7/13 Presented by: Marcia Tabak

  2. Access to forms: After connecting to the hotel wireless, Do this:1 - go to FloridaRealtors.org2 -Click on “Legal Center” on the left3- Click on “Hot Topics”

  3. Residential Contract for Sale and Purchase New Form # FloridaRealtors/Florida Bar-2 Rev. 8/13

  4. Guide • Note: Begin with Florida Realtors /Florida Bar-2 form to follow this presentation • L references line numbers • (redlines L ) references line numbers on the red lined document

  5. New Property Description Paragraph 1(d) • L17-19 (redline L18-20) Added refrigerator(s), smoke detectors & storm shutters/panels as items to be conveyed, if Seller owned and on the Property on the date of the initial offer • Check boxes with additional personal property items deleted

  6. Purchase Price Paragraph 2(a) • L29 (redline L34) Eliminated option of deposit due upon acceptance. Added a default if neither box is checked Paragraph 2(b) • L35 (redline L40) Additional Deposit default changed to 10 days, if blank is not filled in

  7. Effective Date Paragraph 3(b) • L49 (redline L54) • Effective Date = date last party signs and delivers the offer.

  8. Occupancy and PossessionParagraph 6(b) • L74,) (redline L81) New provisions and check box for Property subject to lease, or to be leased after Closing. (includes Seller post occupancy) • NEW Time Frames L75-77 (redline L82-84) Seller to provide Buyer with lease(s) within 5 days of Effective Date • L77-81 (redline L84-88) Buyer may terminate Contract within 5 days of receipt of the lease

  9. Financing Contingency Third party Financing Paragraph 8(b) • L90 (redline L97) Added a new blank line to describe the type of loan being sought • L93 (redline L101) Added 30 years as a default for term of loan being sought

  10. Financing Continued • L99 (redline L114) Upon receipt of Loan Commitment Buyer is to notify Seller in writing, • L99-104 (redline L114-119) If Buyer doesn’t get the Commitment, either party may terminate except for certain conditions • Buyer notifies Seller that Commitment has been waived or obtained or 7 days prior to Closing

  11. Closing Costs; Title Insurance Paragraph 9 (b) and (c ) • L145 (redline L161)Added Owner’s Policy Premium to Buyer’s costs if 9c iii is selected • L153 (redline L169) includes municipal lien search as an item within definition of Owner’s Policy and Charges

  12. Flood Zone Paragraph 10 (d) • Revised because of Biggerts Waters 2012

  13. Flood Disclosures • L199-201 (redlines L216-218) Revised references to specific flood areas • L201-203 (redlines L219-223) If floor elevation is below minimum flood elevation or Property not eligible for insurance through NFIP, then Buyer may terminate.

  14. L203 (redlines L 221) Time to terminate for flood related reasons is negotiable, unless left blank; 20 days is the default • L206-208 (redlines L223-226) Reference to fact that flood insurance rates for nonprimary residences are increasing • L208-209 (redlines 226) New flood elevation cert. may be needed

  15. FIRPTA Disclosure Paragraph 10(i) • L225-227 (redline L242-244) Nonforeign Seller can provide certification of nonforeign status • L227-229 (redlinesL244-246) Parties should seek expert advice regarding FIRPTA

  16. General Inspection Paragraph 12 b(i) L250-251 (redlines L267) Allows Seller to review the relevant portion of the Professional Inspector’s report, if Buyer delivers list of General Repair Items, if Seller makes the request in writing

  17. Time for Seller to Estimate costs of required repairs • Paragraph 12 b(iii),c(ii), d(ii) L267, L290, L306 (redlines L285,L308, L324) Changed to 10 days from receipt of notice for Seller to estimate costs of: • General Repairs: repairs and notify Buyer or (2) obtain second inspection and report estimates • WDO Repairs: treatment and cost to repair damage • Close-out Building Permit for Seller to estimate costs to remedy

  18. Standards • D. Lease Information: • Previously this Standard dealt with delivering Leases to Buyer. Now it doesn’t. See Paragraph 6 • L454-456 (redlines L472-475) Estoppel Letters from Tenants are to be delivered to Buyer 10 days prior to Closing. (new time frame) • L458-461 (redlines L478-481) If info differs materially from what Seller provided pursuant to Paragraph 6 (b),Buyer may terminate 5 days after receipt but not later than 5 days prior to Closing. 2 bites at the

  19. Standards Continue • F. Time: • L472 (redlines 492) Time periods that end on, and dates that occur on Saturdays and Sundays extends to next business day, whether handwritten or preprinted except • Time for acceptance and Effective Date

  20. Standards Continue • Standard I (ii) • Closing Location, Documents and Procedure: L494 (redlines L514) Specifies documents that Seller is to furnish. No longer covers who bears the cost for preparation.

  21. Standards Continue • Standard O. New words added to caption • L548 (redline 569) Delivery Delivery is in part defined in this Standard and is more significant since Paragraph 3(b) was revised • L555-556 (redline L576-577)Contract execution includes electronic signatures

  22. Standards Continue • T. Loan Commitment: L571-572 (redline L592-593) Definition of loan commitment excludes pre approval and prequalification.

  23. Standard V • Firtpa Replaces Rider I. L576-582 (redlines L597-601) Describes parties’ duties: Buyer to withhold unless: • L583-586 (redline L604-609) Seller is nonforeign and Buyer accepts this proof • L589-591(redline L610-612)Certificate for reduced or eliminated withholding has been issued • L579(redline L600)An exemption is claimed

  24. Withholding certificate not obtained at Closing • L592-598 (redlines L613-619) If Seller’s application is pending at Closing but no withholding certificate has been issued, Buyer, at Buyer’s option may: Escrow 10% or Submit the 10% to the IRS • L599-604 (Redlines L620-625) Seller to provide 10% and Buyer to copy Seller with forms

  25. Addenda Paragraph 19 • L606 (redlines L631) • Renamed A. Condominum rider and H. Homeowners’/Flood and P. Lead Based Paint • Marked Rider I. RESERVED, as Firpta is now Standard V

  26. AS IS CONTRACT • AS IS Changes include: all previous changes except Paragraph 12-Repairs (*Note: line # references up to this point have not been for the AS IS contract & Other AS IS changes: Paragraph 10(j), Paragraph 12 Standard X

  27. AS IS Changes Con’t • The AS IS Line References are to the AS IS Contract • Form# As Is Florida Realtors /Floridabar -2 • Rev. 8/13 • Paragraph 10(j) • L219 (Redline L236) Paragraph 10(j)- tightened verbiage from “stated” to “provided” to cover verbal statements

  28. As IS Changes con’t • Paragraph 12 (a) • L230 (redline L248) substituted words “after” for “from “ to minimize confusion in calculating time • L234 (redline L252) removed the word immediately from the statement regarding the Deposit being returned to the Buyer if contract is terminated.

  29. AS IS Changes CON’T Standard X L530 (redline L555) Limited waiver to physical defects L532 (redline 557) Clause to survive Closing

  30. ****Skip next 2 slides unless you want to highlight the other differences (these are not new) between the “As Is” Residential Contract for Sale and Purchase (FloridaRealtors/FloridaBar-ASIS-1) and the Residential Contract for Sale and Purchase (FloridaRealtors/FloridaBar-1

  31. Title • Form number- Paragraph 6 (a): Buyer accepts the condition of Property at time of occupancy Paragraph 9(A): Seller’s closing costs do not include sums for: General Repair Items, WDO defects, correcting permits. Seller is responsible for the As Is Maintenance Requirement.

  32. Paragraph 10(j): References more than Johnson v Davis language. Paragraph 11: Seller’s responsibility to maintain the Property is the As Is maintenance Requirement. Paragraph 12: Inspection of the Property is a free look. Also, Seller is to assist with permit defects at no cost. Paragraph 18 Standard A (i): Clause that formerly contained a strike out in Para VII of the As Is contract was purposefully deleted. Paragraph 19: Riders K (As Is) and L (As IS with Right to Cancel) do not appear in addenda but instead are marked reserve.

  33. Residential Contract for Sale Comprehensive Rider to the and Purchase Summary of Changes • New Form # CR- 2 • New Rev. 8/13

  34. Rider A. Condominium Rider • New title • Default time frames added to: 1. Buyer obtaining approval by Association 2. Seller to initiate approval of Buyer 3.Document execution for first right of refusal to begin

  35. Condo Rider Con’t • Paragraph 3(a) Condo Assessments • describe payment as a $ amount, • with a check box indicating when payment is to be made monthly, quarterly, semi-annually, annually Extra line provided, if there is a 2nd assessment

  36. Condo Rider Con’t. • Paragraph 3(b) • Italicized language • Directs that Rider B be used to disclose HOA assessments

  37. Rider B. Homeowner’s Association Disclosure • Changed introductory sentence Why: to confirm that a completed HOA Disclosure, initialed by the parties was given to the Buyer prior to contract execution, which eliminates 3 day right to rescind

  38. Riders con’t • Rider C. Seller Financing Added a blank line to describe the term of the loan and a default of 30 years.

  39. Rider E. FHA/VA • Paragraph 2 • 2 • Added a default of $250.00 to cap appraisal repairs, if blank isn’t complete Paragraph 3 Removed blank line and inserted “purchase price” as the amount the property must appraise to meet FHA financing contingency.

  40. Rider F. Appraisal Contingency • Deliver Appraisal to Seller, if low and notice that Buyer wishes to terminate the contract or to remove the contingency, within 3 days of time inserted in the contract • Additional to Buyer’s right to terminate per Paragraph 8 if appraisal doesn’t support Financing

  41. Short Sale Approval Contingency • Paragraph 4 • Substituted a requirement that Seller must deliver a copy of Seller’s Accepted Short Sale Approval to Buyer instead of just a written notice to keep either party from canceling after Short Sale Approval Deadline. • New formula for Contract Expiration Date: • 30 days after expiration of Short Sale Approval Deadline, includimg extensions of Short Sale Approval Deadline.

  42. Short Sale Approval Contingency Continue • Paragraph 5 • Only initial deposit and Short Sale Approval Deadline will be calculated from Effective Date

  43. Homeowners’/FloodInsurance • Added flood as a new component of rider • Makes Buyer’s offer contingent on obtaining flood insurance coverage in an amount not to exceed the cap inserted in the blank by a negotiated date.

  44. Rider K “As Is” • Added revisions from the “as is” contract to this rider • Waiver limited to physical defect and survives Closing

  45. Questions

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