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FAR/BAR update: Changes worth your attention

By Marcia Tabak
 

March 6, 2017 – What has changed in the FloridaRealtors/FloridaBar contract that debuts April 4? I covered changes to the financing clause in the last issue of the Legal News. However, other items that might impact your transactions should also be noted.

Other FloridaRealtors/FloridaBar contract changes

5(b) Extension of Closing Due to Force Majeure
What happens if a hurricane targets Florida during the contract period? If insurance isn't available or the closing cannot occur because utilities or other closing services have been interrupted, an extension to closing is currently built into the contract under Paragraph 5(b). The upcoming revision lengthens the extension to closing and relocates the details about the extension from 5(b) to Standard G. (See details under Standard G below.)

9(c) Title Evidence and Insurance
A sentence was added to this section that clarifies the meaning of "municipal lien search," which is usually done at the same time as a title search. However, a municipal lien search goes beyond a title search, which primarily uses data recorded in public records.

10(b) Permits Disclosure
The contract currently states that the seller does not know of any improvements made to the property beyond those that have been disclosed in writing to the buyer. In the updated version, a new sentence has been added to this paragraph that requires a seller to promptly give the buyer "all plans, written documentation or other information in seller's possession, knowledge or control" that relates to those improvements made without closed permits. My suggestion: If you list a property that includes unpermitted improvements or open permits, ask the seller to gather all information in their possession about the improvement so it can be provided to the buyer pursuant to this revision.  

10(j) Seller Disclosure (only in regular contract – already in AS IS version)
As before, the seller must notify the buyer of facts that materially affect the value of the property, if known by seller but not the buyer, and "not readily observable." A new sentence now requires a written disclosure by the seller – not just verbal – if he has "received written or verbal notice from any governmental entity or agency" about any "uncorrected building, environmental or safety code violations."

Standard G
Force Majeure – which extends time to perform contract obligations, including closing, due to extreme weather, terrorism, etc. – lengthens contract timelines in the event of a covered disaster. Under the new terms, the performance of contract obligations, including closing, may be extended up to seven days after performance becomes possible and insurance and closing services become available – an increase from the current three days. The new language also states that Force Majeure cannot extend a contract longer than 30 days past contact closing date; currently, it can extend a contract no longer than 14 days past closing date.

Standard V – FIRPTA
We removed a few items from Standard V, which applies when you deal with foreign sellers.

  1. Reference to the "$300,000 exemption" was removed because clients should get specialized advice for any exemption.
  2. A buyer's discretionary right to accept a seller's proof of non-foreign status was eliminated in favor of a buyer's acceptance of a certification outlined in the contract – assuming the buyer doesn't know that the certification is false. 

We have a redline version of the new FloridaRealtors/FloridaBar contract posted online – changes are in red, additions in blue.

If you have any questions, we want to help. Send questions to newseditor@floridarealtors.org. If we find noticeable confusion over any part of the contract update, we'll cover it in a future edition of the Legal News.

Marcia Tabak is Deputy General Counsel of Florida Realtors

© 2017 Florida Realtors

 

Related Topics: Florida Realtors Legal News