January 1, 2016 Form Changes
January 1, 2016 Form Changes
Nine forms or contracts have been revised, all to be effective January 1, 2016.
K1321 – Residential Sales Contract
K1281 – Exclusive Right to Lease
K1336 – Exclusive Right to Sell Listing Agreement
K1337 – Exclusive Agency Listing Agreement
K1355 – Exclusive Right to Sell Unimproved Land
K1369 – Coming Soon Addendum to Listing Agreement
K1344 – Contingencies and Clauses Addendum
K1118 – Purchaser’s Limited Access to Premises Addendum
K1210 – Walkthrough Inspections
K1321 – Residential Sales Contract
- Cooperative Broker v. Buyer Broker. The introductory paragraph has been updated to address the term Buyer Broker. We received feedback from the membership that all cooperating brokers were not buyer brokers but could be independent contractors. Therefore we changed the term Buyer Broker to Cooperating Broker. This change is carried through the Contract and any addenda we are updating.
- Time is of the Essence. The Consumer Financial Protection Bureau created new rules which govern the practice of lenders and settlement agents. The industry is expecting that some delays in settlement may occur as lenders attempt to comply with the new regulations. The new contract language in paragraph thirty-five clarifies the carve-out to time is of the essence and the default provisions. In the event that the contract remains contingent on financing and the settlement must be delayed to allow the lender to comply with the TILA-RESPA Integrated Disclosure rule, such delay will not constitute a default by the Buyer. Under these circumstances, the paragraph also grants the Seller the right to void the contract.
K1334 – Contingencies and Clauses Addendum
- Sale of Buyer’s Property and Kick-Out. Paragraph four of this contingency has been updated to clarify that in the event a further delay is required to obtain coinciding settlements, the Buyer can declare the contract void but that the parties retain the right to reach an agreement to extend the settlement date on terms acceptable to the Seller and the Buyer.
- Settlement of Buyer’s Property. This contingency has been updated to clarify that in the event a further delay is required to obtain coinciding settlements, the Buyer can declare the contract void but that the parties retain the right to reach an agreement to extend the settlement date on terms acceptable to the Seller and the Buyer.
- Contingent on the Seller Purchasing Another Home. This contingency has been clarified. Rather than requiring a ratified contract for the purchase of another property to satisfy the contingency, the standard is now that the Seller has “identified another home for purchase”. This looser standard will give the Seller the ability to use the entire period allocated to the contingency rather than be obligated to remove the contingency upon ratification of a contract for purchase of another home. The membership requested this change to address the fact that the old language may not have allowed a Seller to remove key contingencies, such as a Home Inspection Contingency, prior to removing this contingency.
K1336 – Exclusive Right to Sell Listing Agreement; K1337 – Exclusive Agency Listing Agreement; K1281 – Exclusive Right to Lease Listing Agreement; and K1355 – Exclusive Right to Sell Unimproved Land Listing Agreement
- Pre-Marketing (Coming Soon) Paragraph. The language in this paragraph has been clarified. The Pre-Marketing (Coming Soon) Addendum need only be attached if the property is going to be marketed prior to being entered in the MLS as an active listing.
K1369 – Pre-Marketing Addendum to the Listing Agreement
- The form has been modified to include the ability to conduct Pre-Marketing activities on a property listed for lease.
K1118 – Buyer’s Limited Access to the Premises Agreement (Decorator’s Agreement)
- This form had not been updated in years. The parties will now have to agree on an access date and the terms of the access by the Buyer or his representatives.
- The form allows access for the following purposes (1) to measure rooms, windows or show the property to contractors or decorators and (2) to allow the Buyer to deliver furniture to the property prior to settlement.
- The form specifically prohibits the Buyer from doing work on the property without prior written approval from the Seller.
- The form clarifies that the Seller will not be responsible for any damage or loss of the Buyer’s personal property and that in the event settlement does not occur, the Buyer will have 15 days to remove his personal property. After that, the Seller may dispose of the personal property in any way he deems fit.
K1210 – Walkthrough Inspection(s)
- This form has been updated to track the Home Inspection Contingency. The form now accounts for the possibility that multiple walk through inspections were conducted
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