2019 georgia real estate contracts - iret€¦ · title: microsoft powerpoint - 2019 amendments,...

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2019 GEORGIA REAL ESTATE

CONTRACTS:Amendments, Exhibits and Special

Stipulations

Course objectives

Differentiate exhibits and amendments

Identify and demonstrate proper use of special stipulations for 2019

Identify and demonstrate proper use of amendments for 2019

Identify and demonstrate proper use of exhibits for 2019

Copyright the tom gillette company, inc.

exhibit


AKA Addendum

AKA Rider

Addition to offer; extra page(s)

Special stipulation


Clarifies the agreement

Controls exhibit if there is conflict

amendment


AKA Modification

Changes contract which is already in place

Creates new contract

Interpretation of contracts


•Parol Evidence Rule -________________ testimony cannot be introduced which contradicts a __________________ contract unless there is fraud or mistake.

Verbal

written

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Who Benefits? – The language of a contract is most ____________________ construed against the person who ______________ _____ __________________.

strictly

wrote thelanguage



When Was It Said? – The _____________ statement made is the ______________ statement to be ____________________.

last

first

considered



Does Handwritten Bear Significance? –When there is conflict in the language, _____________________ will control that which is ___________________, and _________________ will control _______________ ___________________.

handwritten

typedtypedpreprinted language



What About Exhibits and Special Stipulations?When there is conflict in the language, _________________ ___________________ control _______________, and _________________ control that which is _______________________. The exception is a __________ ____________________. An example is ________ or ________ ______________ _________________.

special stipulationsexhibits

exhibits

preprintedsuper exhibit

VA FHAamendatory language

Requirements of a valid contract


Mutuality

Competency

Legality

Consideration

Contract definitions


Valid – Contains all of the ___________ _____________ of a contract.essential elements

Void – One or more of the __________ ____________ are missing.

essential elements

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Voidable – All of the __________ ____________ are present, however one or more may be removed at the option of the _________ ___________.

essential elements

injured party

Invalid – Had a period of validity but the validity has ___________________.ceased



Enforceable – The __________ can be introduced in _________ and the ___________ will hear the ____________________.

Unenforceable – The _________ will not allow the _________ to be introduced.

testimony

testimonycourt

court

courttestimony

Forms Table of contents


Simple 4 page resource

Inclusive of all 2019 forms

Provides good reference

GAR Consumer brochures


CB01 ABC’s of Agency

CB04 Lead Based Paint

CB07 Mold Pamphlet

CB08 EPA Radon

CB10 Selling a House

CB13 Buying a House

CB16 Buying in HOA Community

GAR Consumer brochures


CB19 Buying a Condominium

CB22 Buying New Construction

CB25 Buying in Flood Hazard Areas

CB28 Distressed Properties

CB31 New Landlords

F107 authorization to show unlisted property


Can be used for sale or lease (working with buyer or tenant)

Provides commission protection

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F116 agreement to work with buyer as Customer


Should be used whenever working with a buyer who has not signed a brokerage engagement or customer agreement

Provides some commission protection

F143 AGENCY EXHIBIT


Use with non-GAR forms. Includes language required by law (10-6A O.C.G.A.)

F146 additional signature page (brokerage agreement)


Specific to brokerage engagements when there are more than 2 clients

F149 retainer fee exhibit


Provides the election of negotiating a retainer fee.

F204 Condo re sale p&s exhibit


Replaces Condo P&S Agreement

Add to F20

F207 Lease purchase and sale exhibit


Brings together F201 (Purchase and Sale Agreement) and F913 (Lease Agreement)

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F243 OPTION TO PURCHASE leased property


Exhibit added to lease agreement

Creates option right vs purchase obligation

F249 counteroffer


If used, seller DOES NOT sign F201!!!

Each subsequent replaces the former

F258 Co-op commission agreement


Use before showing if you are interested in being paid!!

F270 notice to unilaterally extend closing date for eight

days


Either party may extend but reasons are specific

F285 unilateral notice to withdraw offer


Should be used anytime offer is withdrawn

Very underused form

F288 notice to reject offer/counteroffer


Provides proof of presentation

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F301 Seller’s property disclosure statement


SUBSTANTIALLY revised for 2016; MINOR revision for 2017, 2018, and 2019

Shorter and hopefully more consumer friendly

Be careful of the fixture section

F319 U.S.C. Section 4852D


Provides for a disclosure of rights to buyer under federal law concerning lead

F322 community association fees, disclosure s and issues


Language tweaked for 2019

Disclosure and fees have become a growing problem

F325 broker’s information


Provides broker protection with written disclosure and source

Dots the “i’s” and crosses the “t’s”

F401 all cash sale exhibit


Created in 2014

Allowed for removal of Source of Buyers Funds and Appraisal Contingency

F404, 407, 410, and 413 loan exhibits


Must use one of these or the purchaser has no protection for financing

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F510 CLOSING ATTORNEY ACTING AS HOLDER OF EARNEST MONEY EXHIBIT


Specific to closing attorney or firm holding the earnest money

Must also us F511

F511 AGREEMENT OF CLOSING ATTORNEY TO SERVE AS HOLDER OF EARNEST MONEY


This is not an exhibit to the contract but an agreement of the named closing attorney/firm to hold the earnest money

Must be used when using F510

F519 MUTUAL AGREEMENT to terminate purchase and sale

and disburse em


Terminates rights and claims of anyone signing

Includes disbursal of earnest money

F522 Terminate;Termination and release


Does NOT terminate brokers rights

May be unilateral termination without earnest money release

May be unilateral termination with earnest money disbursal

F610 short sale contingency


Hopefully, the sun is going to set on this exhibit…

F704 amendment to address concerns with property


Negotiation during due diligence period

Don’t get dragged out beyond due diligence date!!

SS302

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F819 binding agreement date notification


Used to clarify binding agreement date

F822 agreement to keep offers confidential


Nothing in law, rules or ethics to keep a seller from shopping a contract

Separate contract, presented and signed prior to presentation of F201

F825 confidentiality and non-disclosure agreement


Introduced in 2016

Expected to be used primarily in commercial property transactions

F919 Consent to take pictures and video


An exhibit to a lease. Provides tenant permission to produce images for marketing.

F928 Notice (to be used in lease transaction)


Generic notice for leases.

Special stipulations index


Re-indexed and re-numbered in 2009

No changes for 2010

Minor changes in 2011, 2012, 2013, 2014, 2015, 2016, and 2017.

No changes for 2018 or 2019.

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Ss 102 agent acting as principal


Used when a licensee is buying, selling, leasing, etc. for themselves

Ss 104 agent’s intent to resell property


Provides informed consent on behalf of the seller

Provides protection for licensee buyer

Ss 106 material relationship disclosure


Essentially a repeat of language in F201 14.C.

Could there be relationship conflicts with those other than buyers or sellers in a transaction?

Ss 108 notice authorized by unrepresented party


Provides for imputed notice to a non-agent (such as an agent working with a customer)

Ss 202 agricultural lease


Notifies buyer that the land is leased to another for cultivation

FSA (Farm Service Agency)

Ss 204 conservation reserve payments


A program that assists farmers and ranchers in complying with government environmental mandates

Administered by FSA

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Ss 206 conservation use tax exemption


Allows land to be taxed at current use rather than FMV

Ss 208 farm equipment


Affirms farm equipment, materials and supplies will be treated as personal property

Ss 210 fsa crop bases, entitlements and allotments


Sets forth the agreement on the handling of payments through FSA

Ss 212 hunting rights


Discloses the fact that property is leased for hunting and sets forth the agreement of the handling of payments

Ss 214 irrigation systems


Stipulates that the farm irrigation system as installed will remain with the property

Ss 216 Timber lease


Stipulates there is a timber lease on the property and creates an agreement on the pro-ration of lease payments

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Ss 218 timber sale agreement


Allows seller to retain ownership of certain named timber and provides a time period for removal

Ss 302 amendment to address concerns as notice to terminate


Used with F704 to terminate upon end of due diligence period if there is no mutual agreement on concerns

One of the most important special stips!

Ss 304 due diligence larger payment


Increases the $10 payment in 11.A.1 of F201

Use when representing seller or seller objects to taking property off market for $10

Ss 306 flood zone warranty


Seller’s statement that no part of the property is in the 100 year flood plain and allows buyer to terminate if it is

Ss 308 kick out provision


Allows seller to continue to market property during contract period, including due diligence

Ss 310 Defects not found due to seasonal issues


Seller warrants certain items that cannot be inspected to be in good working order

i.e air conditioning unit during the winter

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Ss 312 repair/replace items after closing


Similar to SS 310 but does not limit to seasonal items

Ss 314 repair/replace items after loan approval (extend closing)


Similar to SS 312 but work is done after loan approval and closing is extended

Ss 316 repairs by seller, limit on cost


Limits seller liability for cost of stated repairs; puts buyer on the hot seat

Ss 318 septic system clearance


Used to negotiate who shall be responsible for paying for lender required septic system clearance letter

Ss 320 structural engineer’s written opinion


Obligates seller to provide a report from a licensed structural engineer on any structural repairs

Ss 322 survey reveals less acreage

Copyright tom gillette company, inc.

Makes contract contingent on a minimum number of acres

Buyer has right to terminate if property is smaller

Right to terminate has time limit

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Ss 324 termite report, improvements not covered


Excepts certain named structures from wood infestation report i.e. sheds, barns, etc.

Ss 326 termites, guaranty provided by seller


Requires seller to provide a 1 year guarantee against subterranean termites

May include treatment and repair

Ss 328 Termites, seller agrees to treat and/or repair


Obligates the seller to treat and/or repair wood damage

Is this a blank check?

Ss 330 termites, seller to provide new report


Requires seller to provide a clear wood infestation report

Requires seller to treat if infested

Are we going backwards?

Ss 331 utilities, due diligence to begin


Due diligence begins when seller has utilities turned on

Must be done within certain period or buyer has right to terminate

Ss 332 walk through list, items completed after closing


Creates obligation of seller to complete items on walk through list

Survives closing?

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Ss 334 survey


Attaches survey to contract

Allows buyer to terminate if new survey is “materially different”

Ss 402 Additional earnest money


Requires buyer to deposit more earnest money

Failure gives seller the right to terminate

Ss 404 construction deposit Non-refundable


Deposit held by seller (builder)

Uses liquidated damage language

Buyer representation?

Ss 406 earnest money converted to non-refundable deposit


Allows earnest money to be paid to seller when due diligence has expired and all contingencies are met

Ss 408 earnest money held until specific time


Modifies default language so earnest money can not be deposited before a date decided

Ss 412 liquidated damages


Makes earnest money sole remedy for buyer default

Protects buyer

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Ss 414 additional option money


Additional option monies applied to purchase price with lender approval

Ss 502 bankruptcy contingency


Acknowledges seller has filed for bankruptcy

Makes contract contingent on final judgement

Ss 504 ESCROW ACCOUNT TRANSFER (LOAN ASSUMPTION, CASH TO CONTROL)


Transfer of escrow in lieu of proration

Ss 506 Exchange (Buyer utilizing 1031)


Obligates seller to cooperate if buyer elects to use an IRC 1031 exchange

Does not limit buyers obligations

Ss 508 exchange (seller utilizing 1031)


Obligates buyer to cooperate if seller elects to use an IRC 1031 exchange

Does not limit sellers obligations

Ss 510 interest rate fluctuations prior to closing


Obligates buyer if interest rate is no more than 2% higher than agreed

Use in conjunction with financing exhibit

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Ss 512 loan assumption contingency


Makes contract contingent on buyer’s ability to assume a loan

Ss 514 seller retains lease-back


Seller to lease after closing

May give seller some flexibility in buyers market

Ss 518 swap of real estate property contingency


Makes contract contingent on the parties swapping property

Y’all do this a lot??

Ss 520 trade-in of buyer’s property contingency


Makes contract contingent on parties coming to a mutually acceptable agreement for seller to take buyer’s property as part of purchase price

Ss 522A Number of days from binding agreement to apply for

loan


Requires buyer to apply for a loan within a certain number of days and deliver a Loan Estimate and Notice of Intent to Proceed

Ss 522b Number of days from binding agreement to apply for

loan


Same as SS522A except requires buyer to provide a Loan Estimate OR a written letter of application from a lender

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Ss 602 access to public road


Seller’s warranty of access for rights of ingress and egress

Ss 604 amenity package release


Places the responsibility of verifying the community amenity package on the buyer

Ss 606 appraisal determines price


Let’s appraisal determine sales price (“Do you feel lucky? Well do ‘ya punk?”)

Provides high and low opt out price

Ss 608 assessments or liens


Discloses assessment or lien on property and stipulates responsibility

Ss 610 assignment


Allows contract to be assigned

Assignee and buyer jointly liable

Be careful of mortgage fraud!

Ss 612 dock permit contingency


Requires seller to obtain permits for dock or other improvements

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Ss 614 Business days defined


Creates definition for business days, if used in contract

Can’t imagine why one would use business days…..

Ss 616 buyer shall list property with broker contingency


Requires buyer to list property with a broker

Used when purchase is contingent on house selling

Ss 618 closing date extension


Provides buyer with right to extend closing by paying additional earnest money

Ss 620 commission


Puts commission back in sales contract

May use with FSBO’s (or use F107 instead)

Ss 621 community association not required


Seller’s warrant that there is not a mandatory community association which the buyer must join

Ss 622 conformed copy of agreement


Used when a new, clean document is needed to replace a contract which is messy due to counters. DOES NOT create a new agreement

Use more?

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Ss 624 court permission to sell contingency


Gives the buyer the power to terminate if court approval is not obtained by date certain

Ss 625 digital signatures


Confirms that the digital date is the date of signing (and time, if applicable)

Ss 626 divorce contingency


Makes contract contingent upon:

All parties agreeing

Final judgment

Ss 628 lease of property contingency


Contract becomes contingent on buyer’s ability to lease property he/she owns

Also provides for when, how long and how much

Ss 630 manufactured and mobile home bill of sale


Seller’s warranty that Certificate of Permanent Location has been filed

Obviously, should be used when selling manufactured housing

Ss 632 multiple counter offers


Use on counter offer form (F249)

Recommend broker approval and guidance

Can be confusing

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Ss 633 option payment applied to purchase price


Pretty self explanatory

Ss 634 rent proration


Obligates parties to pro-rate all applicable rents

Obligates seller to transfer security deposits

Obligates seller to provide affidavit at closing stipulating provisions of current leases

Ss 635 rent applied towards purchase price


Allows buyer to apply a portion of rent to purchase price if closed

Beware of lender requirements

Usually will only allow rents above market, and then with limits

Ss 636 school district verification contingency


Provides buyer right to terminate if school district is different than believed

Ss 638 selection of closing attorney


Simply states who has the right to choose closing attorney

Ss 639 stigmatized property


Sellers warranty of knowledge of death

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Ss 640 tax id as description


Stipulates between the parties that the tax ID number is sufficient to use as a legal description

I would stay away from this one if I could

Ss 702 access to property, buyer


Stipulates under what conditions buyer has the right to enter property

Ss 704 appliances and systems in good working order


Sellers warranty on appliances and systems remaining with property

Ss 706 building permit, ability to acquire contingency


Provides the buyer the right to terminate if unable to obtain proper permits

Ss 708 carpet to be professionally cleaned


Requires seller to have carpets cleaned within 3 days prior to closing

Ss 710 dwelling to be constructed in location shown on survey

contingency


Requires attached survey

Provides buyer with right to terminate if dwelling can not be constructed on the location agreed upon

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Ss 712 home warranty (buyer’s protection plan)


Obligates the seller to provide a 1 year warranty for buyer

Stipulates who and price

Ss 714 Multi-family zoning contingency


Requires seller to provide verification from zoning authority as to multi-family zoning

Should zoning be specific?

Ss 716 permits contingency


Makes contract contingent on buyer’s ability to obtain applicable permits

Ss 718 plumbing fixtures, required compliance


Obligates seller to bring plumbing into compliance with stated ordinance or law

Ss 720 property delivery condition


More inclusive than ¶C3 of F201

Use if you think seller may be a low class pig

Ss 722 property sold with named defects


Buyer’s agreement to accept certain defects in property

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Ss 724 removal of fixtures with repairs


Provides seller the right to remove fixtures and repair damage

Ss 726 rezoning contingency


Makes buyers obligation contingent on property being rezoned

Requires all parties to cooperate

Ss 728 rights warranted by seller


Seller warrants that the rights to the property (water, minerals, timber) are not subject to a lease or have been severed

Ss 730 seller’s property disclosure not attached contingency


Requires seller to provide disclosure

Give buyer right to terminate if seller fails

Gives buyer right to terminate if disclosure not acceptable

Ss 732 Seller’s property disclosure not provided


States the seller has no obligation to provide a seller disclosure

Seller and agent must ALWAYSdisclose known latent defect!!

Ss 734 setback/zoning contngency


Makes buyers obligations contingent on their being no violations of zoning or subdivision laws or regulations

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Ss 736 survey contingency (buyer may terminate)


Provides the buyer the right to obtain a survey and terminate obligations if not acceptable

Ss 738 Unfulfilled conditions at closing


Provides time frame for completing obligations after closing

Should be completed at closing

Ss 740 Water Sources


Stipulates source of agricultural water

States status of permits

Ss 742 well clearance letter, allocation of fees


Stipulates who shall pay fee for well clearance letter

Stipulates generally what must be in the letter

43-40-25.1 O.C.G.A.


§ 43-40-25.1. Completion of certain forms not practice of law; contents of certain forms

It shall be lawful for licensees to complete listing or sales contracts or leases whose form has been prepared by legal counsel and such conduct shall not constitute the unauthorized practice of law. In completing a lease or a written offer to buy, sell, lease, rent, or exchange real property, a licensee shall include a description of the property involved, a method of payment, any special stipulations or addenda the offer requires, and, such dates as may be necessary to determine whether the parties have acted timely in meeting their responsibilities under the lease, offer, or contract.

In conclusion


Become intimately familiar with the GAR form package

Aggressively represent YOUR client

Use prepared stipulations, exhibits and amendments

If not available, use boiler plate and have approved by company attorney

DO NOT PRACTICE LAW!!!

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Tom [email protected]

404-372-1969 cell

www.iret.info

2019 georgia real estate contracts - iret€¦ · title: microsoft powerpoint - 2019 amendments,...

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