2015 iar residential forms changes
TRANSCRIPT
IAR Legal Affairs presents:
RESIDENTIAL FORMS CHANGES2015
IAR RESIDENTIAL FORMS CHANGES
The following legal forms were
revised and updated for 2015:
• Purchase Agreement (Improved Property) (#02)
• Purchase Agreement (Unimproved Property) (#34)
• Listing Contract (Exclusive Right to Sell) (#01)
• Listing Contract (Exclusive Right to Lease) (#35)
• Listing Contract (Unimproved Property) (#50)
• Pre-Closing Possession Agreement (#21)
Note: Changes made to form #02 are identical to those made to Form #34 where applicable. Changes made to Form #01 are identical to those made to Forms #35 and #50 where applicable.
NEW FORMS
The following new IAR residential
forms were added for 2015:
• “As Is” Addendum to Purchase Agreement (Form #53)
• Withdrawal of Offer or Counter Offer #____ (Form #54)
• Buyer’s Inspection Response Acceptance of Property
Condition (Form #04)
• Buyer’s Inspection Response #___ Conditional
Acceptance of Property Condition (Form #05A-D)
• Seller’s Inspection Response #___ (Form #06A-D)
NOTE: Forms 4, 5 and 6 replace the previous
Inspection Response Form (#17).
REPLACED FORM
The following form has been
eliminated for 2015:
• Independent Inspection Response (Form
#17A-E).
This form was replaced with new Inspection
Response Forms #04, #05 and #06.
IAR PURCHASE AGREEMENT CHANGE
RATIONALE:
To clarify that wall mounts are fixtures and stay with the property and to
remove remote controls for satellite dishes as they are obsolete.
• Line 16
Note: New language is indicated in red. Strikeouts
indicate language being deleted.
… and fixtures, ceiling fans and light fixtures, towel racks
and bars, storm doors, windows, awnings, TV antennas,
wall mounts, satellite dishes and controls, storage barns,
all landscaping, mailbox, garage door opener with . . .
IAR PURCHASE AGREEMENT CHANGE
RATIONALE:
Clarifies that, just because the Seller marked on the Seller’s
Disclosure that an item is “not defective” doesn’t mean that it
is incorporated into the Purchase Agreement and staying with
the property.
The terms of this Agreement will determine what items are included/excluded, not the Seller’s Disclosure Form, multiple listing service or other promotional materials.
• Lines 24-25
Note: New language is indicated in red. Strikeouts indicate language being deleted.
IAR PURCHASE AGREEMENT CHANGE
• The entire Earnest Money section of the
Purchase Agreement has been replaced with the
following new language:1. Submission: Buyer submits $_____ as Earnest Money which shall be
applied to the purchase price at closing. Unless indicated otherwise in this
Agreement, the listing broker shall act as Escrow Agent and shall deposit
Earnest Money received into it escrow account within two (2) banking days of
acceptance of this Agreement and hold it until time of closing the transaction or
termination of this Agreement. Earnest money shall be returned promptly to
Buyer in the event this offer is not accepted. If Buyer fails for any reason to
timely submit Earnest Money in the contracted amount, Seller may terminate
this Agreement upon notice to Buyer prior to Escrow Agent’s receipt of the
Earnest Money.
RATIONALE: Due to Indiana license law changes regarding
earnest money.Note: New language is indicated in red. Strikeouts indicate language being deleted.
IAR PURCHASE AGREEMENT CHANGE
• Earnest Money Section Continued2. Disbursement: Upon notification that Buyer or Seller intends not to perform, and if
Escrow Agent is the Broker, then Broker holding the Earnest Money may release the
Earnest Money as provided in this Agreement. If no provision is made in this Agreement,
Broker may send to Buyer and Seller notice of the disbursement by certified mail of the
intended payee of the Earnest Money as permitted in 876 IAC 8-2-2. If neither Buyer nor
Seller enters into a mutual release or initiates litigation within sixty (60) days of the
mailing date of the certified letter, Broker may release the Earnest Money to the party
identified in the certified letter. If the Escrow Agent is the Broker, Broker shall be
absolved from any responsibility to make payment to Seller or Buyer unless the parties
enter into a Mutual Release or a Court issues an Order for payment, except as permitted
in 876 IAC 8-2-2 (release of earnest money). Buyer and Seller agree to hold the Broker
harmless from any liability, including attorney’s fees and costs, for good faith
disbursement of Earnest Money in accordance with this Agreement and licensing
regulations.
RATIONALE: Due to Indiana license law changes regarding
earnest money.
Note: New language is indicated in red. Strikeouts indicate language being deleted.
IAR PURCHASE AGREEMENT CHANGE
RATIONALE: Due to Indiana license law changes regarding earnest money
as well as to clearly indicate legal remedies available to both parties in case
of a breach of contract.
• Earnest Money Section Continued3. Legal Remedies/Default: If this offer is accepted and Buyer fails or refuses to close the transaction, without legal cause, the earnest money shall be retained by Seller for damages Seller has or will incur. Seller retains all rights to seek other legal and equitable remedies, which may include specific performance and additional monetary damages. All parties have the legal duty to use good faith and due diligence in completing the terms and conditions of this Agreement. A material failure to perform any obligation under this Agreement is a default which may subject the defaulting party to liability for damages and/or other legal remedies, which, as stated above, may include specific performance and monetary damages in addition to loss of Earnest Money.
Note: New language is indicated in red. Strikeouts indicate language being deleted.
IAR PURCHASE AGREEMENT CHANGE
RATIONALE:
Changes “favorable written commitment” to “loan approval” for
clarification. Also makes the termination of the agreement
optional instead of automatic.
No more than days after acceptance of the Agreement shall be allowed for obtaining favorable written
commitment(s) loan approval or mortgage assumption approval. If an commitment or approval is not
obtained within the time specified above, this Agreement shall may terminate unless an extension of
time for this purpose is mutually agreed to in writing.
• Line 71 (2014 version) Line 81 (2015 version)
Note: New language is indicated in red. Strikeouts indicate language being deleted.
IAR PURCHASE AGREEMENT CHANGE
RATIONALE: To ensure that wire transfer fees are paid by the buyer and not
the broker holding the money in an earnest account.
• Line 91 (2014 version) Line 104 (2015 version)
Buyer is advised that the cost incurred to wire funds on behalf of the buyer to the closing agent’s escrow account for the closing of this transaction shall become an expense to the buyer and the actual cost incurred shall appear on the closing statement.
Note: New language is indicated in red. Strikeouts indicate language being deleted.
IAR PURCHASE AGREEMENT CHANGE
RATIONALE: Disclosure to warn buyer and to protect brokers due to recent
Federal Law changes regarding flood plains and flood insurance.
• Line 123 (2014 version) Line 136 (2015 version)
Note: New language is indicated in red. Strikeouts indicate language being deleted.
If the property is located in a flood plain, Buyer may be required to
carry flood insurance at Buyer’s expense. Revised flood maps
and changes to Federal law may substantially increase future
flood insurance premiums or require insurance for formerly
exempt properties. Buyer should consult with one or more flood
insurance agents regarding the need for flood insurance and
possible premium increases.
IAR PURCHASE AGREEMENT CHANGE
• Line 285 (2014 version) Line 304 (2015 version)
Broker is not responsible for obtaining or verifying this information.
RATIONALE: To protect broker from liability regarding obtaining HOA
documents or verifying whether HOA documents are current.
Note: New language is indicated in red. Strikeouts indicate language being deleted.
IAR PURCHASE AGREEMENT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 309 (2014 version) Line 329 (2015 version)
The Indiana State Police has created a registry of known meth contaminated
properties which can be found at www.in.gov/meth. Click on “Clan Lab
Addresses.” Broker is not responsible for providing or verifying this information.
RATIONALE: To give buyer information about how to research a property if
they are concerned about meth contamination. Also protects broker from
liability concerning obtaining information or verifying meth contamination.
IAR PURCHASE AGREEMENT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 317 (2014 version) Line 339 (2015
version)Seller represents and warrants that Seller is not a “foreign person” (individual
or entity) and, therefore, is not subject to the Foreign Investment in real
Property Tax Act. If it is determined Seller is a “foreign person” subject to the
Foreign Investment in Real Property Tax Act, Seller will pay applicable tax
obligation.
RATIONALE: Clarified that Seller will be responsible for the tax if they do fall
under the IRS guidelines as owing such tax.
IAR PURCHASE AGREEMENT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 343 (2014 version) Line 366 (2015
version)By signing below, the parties to this transaction acknowledge: 1) receipt of a
copy of this Agreement; and 2) give their permission information regarding
this transaction may be published in a to a multiple listing service, Internet or
other advertising media, if any, to publish information regarding this
transaction.
RATIONALE: Clarified to buyers that they don’t have the ability to object to
the sales information being published.
IAR PURCHASE AGREEMENT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 380 (2014 version) Line 403 (2015
version)
This □ is □ is not a limited agency transaction.
RATIONALE: To protect brokers from claims of undisclosed limited agency.
IAR LISTING CONTRACT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 21
Seller represents and warrants that Seller □ is □ is not a “foreign person”
(individual or entity). and, therefore, is not Seller □ is □ is not subject to the
Foreign Investment in Real Property Tax Act.
RATIONALE: To have a more definite statement about whether the
transaction may include tax consequences for the Seller.
IAR LISTING CONTRACT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 68
SELLER HAS BEEN ADVISED OF BROKER’S COOPERATIVE
COMPENSATION POLICY, including the amount of any compensation
that will be offered to cooperating Brokers which is ____% of the selling
price.
RATIONALE: To ensure that the actual amount offered is disclosed as
required by the NAR Code of Ethics.
IAR LISTING CONTRACT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 94 (2014 version) Line 95 (2015
version)
Seller has been advised of the benefits of marketing a property through a
multiple listing service. Excluding a property from a multiple listing service
may result in a lower number of offers received and lower sales price.
RATIONALE: To protect a Broker from breach of fiduciary duty claims in the
event Seller requests a “pocket listing.”
IAR LISTING CONTRACT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 184 (2014 version) Line 187 (2015
version)
HOA Management Company: ___________________________________
HOA Contact Information: ______________________________________
RATIONALE: For Broker to gather the pertinent HOA information from the
Seller at the time of the listing.
IAR LISTING CONTRACT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 191 (2014 version) Line 195 (2015
version)
Seller □ does □ does not authorize Broker to disclose the existence of written
offers to Buyer.
RATIONALE: To clarify that this section only concerns offers that are written.
IAR LISTING CONTRACT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 236 (2014 version) Line 240 (2015
version)
Seller consents to receive communications from Broker via telephone, U.S.
mail, email, text message and facsimile . . . “
RATIONALE: To include a newer form of communication.
AMENDMENT/ADDENDUM TO PURCHASE
AGREEMENT PRE-CLOSING POSSESSION
AGREEMENT CHANGE
Note: New language is indicated in red. Strikeouts indicate language being deleted.
• Line 27
If any of the conditions precedent to closing as provided for in the Purchase
Agreement, are not fulfilled within _____ months days from the date of
possession, ….
RATIONALE: Most often will be days rather than months.
IAR NEW RESIDENTIAL
FORMS• “As Is” Addendum to Purchase Agreement (Form
#53)
• To be used in addition to the purchase
agreement if property is being sold “As Is.”
• Withdrawal of Offer or Counter Offer #____ (Form
#54)
• To be used when Buyer or Seller wants to
withdraw an offer or counter-offer before
receiving an acceptance of the offer or counter-
offer.
IAR NEW RESIDENTIAL
FORMS
• Buyer’s Inspection Response Acceptance of Property
Conditions (Form #04)
– To be used if Buyer has had inspections and is not asking the
Seller to make any repairs to the property.
• Buyer’s Inspection Response #___ Conditional
Acceptance of Property Condition (Form #05A-D)
– To be used if Buyer has had inspections and is asking the
Seller to make repairs to the property.
• Seller’s Inspection Response #___ (Form #06A-D)
- To be used by Seller to respond to Buyer’s Conditional
Acceptance of Property Condition (Form #05).
NOTE: These 3 forms are replacing the Indepen-
dent Inspection Response (Form 17A-E)
EFFECTIVE DATE
In addition to the above mentioned changes, all
copyright dates will be changed to 2015.
The new forms and the changes to the existing
IAR forms will be available for member use on
January 1, 2015.
THANK YOU FORMS COMMITTEE
Special thanks must be extended to the IAR Forms Committee. This
volunteer group provides many hours of time each year to provide the most current updates to these forms.
Questions on these changes may be directed to
the IAR Legal Hotline.
IAR Legal Hotline: 1.800.444.5472 toll free
The IAR Legal Hotline is available to managing broker members, and their designated agents, statewide.