Blanks, Asterisks and Filling Out Contracts Correctly
Making an offer? Received one? Don’t skim over the important parts about key dates and timeframes. Hint: If there is an asterisk near a contract page number, a blank on that page should be reviewed.
ORLANDO, Fla. – There are many blanks within Florida Realtors contract forms. Some have default provisions, i.e. 3 days if left blank. Assuming your customer is satisfied with that default provision, you are likely okay to leave that line blank.
Some, however, require information to be placed into them or, quite simply, the answer is unknown. In other words, failing to note which lines may need to be completed – the ones that do NOT have default provisions – can result in the parties arguing over what should now go into that line or, worst case, blow up the entire deal.
A hint for those of you wondering which lines of the contracts might need to be addressed: The residential and vacant land contracts contain an asterisk (*) next to each line where information could be entered or changed.
Using the Florida Realtors/Florida Bar “AS IS” Residential Contract for Sale and Purchase (“AS IS Contract”) as our sample contract for the purposes of this article, here are some trouble-point examples we’ve heard on Florida Realtors Legal Hotline:
- Personal Property section – paragraph 1(d) of the “AS IS” Contract provides a list of personal property items that are included with the sale of the real property. Among the items included are any existing range(s)/oven(s), refrigerator(s), light fixture(s) and ceiling fan(s).
What isn’t included in that list? Any washer or dryer that may exist on the property. Therefore, a buyer who would like an existing washer or dryer to be part of the sale must add “washer and dryer” to the lines within that same paragraph in order for them to be part of the deal.
On the flip side, sellers who have a family heirloom chandelier in the dining room that they wish to remove before closing must make sure that the chandelier is excluded from the sale. This can be done in paragraph 1(e).
A word of caution: Just because an item is listed in the MLS does NOT make that automatically part of the contract. The contract must clearly outline what is going and staying, as that is the document that governs the parties.
- Escrow Agent information – paragraph 2(a) lays out what, if any, initial deposit is to be paid, and it contains lines for entering the escrow agent information. Most transactions involve an initial deposit payment, and it’s hard for buyers to know where to send that money if that portion of the contract is left blank. Additionally, FREC rules under 61J2 of the Florida Administrative Code require this information to be completed. So not only could there be an unnecessary dispute between the parties if this information is not completed, you could face a license law violation.
- “CHECK ONE” – many sections of the contract also have this instruction in bold, all caps lettering. Some have default sections; some, however, do not. Therefore, it is very important that the agents on both sides take the time to make sure the information within those sections is completed appropriately.
Again, look for the asterisk and bold, all caps letters to clarify they have been filled out per your customer’s instructions. An example of this is in paragraph 9(c) of the “AS IS” Contract. This section requires the parties to check a box as to who is picking the closing agent and paying for certain closing costs. There is NO default provision here! One of the boxes must be checked!
What happens if this is inadvertently left blank? Hopefully, the parties can work something out and the transaction doesn’t fall apart. Again, as there is no default provision, short of a compromise, this could end poorly for all involved.
- Home Warranty section – paragraph 9(e) covers whether or not a home warranty plan will be issued, who will pay for it, what company will issue it and what cost it is capped at. A recent caller to the Legal Hotline said that their transaction’s box was checked and that the seller would pay for a home warranty not to exceed $500 – but there was no name written in the blank naming a company to issue the plan.
To make matters worse, the buyer wanted the warranty issued by a company at $500, and the seller found a company who would issue one for $350. As there is no default home warranty company, again, the response was that, hopefully, the parties could work something out.
I hope these examples show how important it is to pay attention to blanks in the contracts. I understand that making an offer and receiving one is an exciting point in the transaction, the culmination of all the hard work put forth by everyone involved. But if time isn’t taken to make sure the resulting contract is completed correctly, it can lead to unnecessary disputes later on.
Additionally, remember, just because the buyer’s agent puts together the offer for their buyer, a listing agent should also take time to make sure that offer was completed appropriately. After all, everyone should have the same goal: to get the deal closed.
Pointing fingers at the “other side” if a dispute comes up over an issue with the contract isn’t helping anyone. As far as I see it, the more eyes reviewing the contract, i.e. buyers, sellers and agents, the less chance there is for something to be missed.
I will close with my oft-repeated line in these articles: Taking the time at the beginning can save a lot of headache at the end. Good luck!
Meredith Caruso is Associate General Counsel for Florida Realtors
Note: Information deemed accurate on date of publication
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