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The Florida BAR and Florida Association of Realtors recently adopted a new standard real estate contract. Because the new “FAR-BAR” contract will control the majority of residential real estate transactions in Florida, it is important to understand what amendments were made. The following is not an exhaustive list of differences between the old and new FAR-BAR contract, but summarizes some of the major changes:
Personal Property
The Check Boxes in Paragraph 1(d) were removed. To simplify the contract three items were added to the list of items transferred by the seller at the time of sale: (1) refrigerators, (2) smoke detectors; and (3) storm shutters. If the buyer and seller want to include additional items of personal property to be transferred to the buyer those items can be inserted at the bottom of Paragraph 1(d).
Escrow Deposits
In Paragraph 2 (Purchase Price), the wording allowing an escrow deposit to be paid upon acceptance has been removed from Paragraph 2(a). According to amended Paragraph 2(a), the deposit can accompany an offer (option i) or can be made within a specified amount of time after the offer (option ii). If nothing is checked, then the contract makes clear that the initial deposit is due within 3 day of the Contract’s effective date.
In Paragraph 2(b), for an additional deposit, the default time was expanded from 3 days to 10 days to allow buyers to make the second deposit only when they are more certain and ready to go forward with the sale.
Effective Date of Contract
The effective date of the Contract in Paragraph 3(b) has been changed to the date by which the last one of the Buyer and Seller has signed and delivered the contract – as opposed to when the contract was only signed by the last party.
Occupancy and Possession
Paragraph 6(a) makes clear that unless otherwise provided in Paragraph 6(b), the seller is agreeing to deliver possession of the property free of any tenants or occupants. Paragraph 6(b) has been added to the Contract and now the seller must check the box in Paragraph 6(b) if the property is being sold subject to a lease or other form of occupancy.
Financing
In Paragraph 8(b), an additional box has been added to allow buyers to identify an alternative form of financing other than conventional, FHA, and VA loans. A default for the loan term was also added. So if the loan terms are not written in, then the default is a 30-year mortgage loan.
Another change in the new version is that the buyer must notify the seller in writing when he receives the written loan commitment. Should the buyer not receive a loan commitment by the loan commitment date, either party may purchase the contract up to 7 days before closing unless the buyer has delivered written notice to the seller that buyer has either received a loan commitment or waived the financing contingency.
That’s it for Part 1. Part 2 of this blog post discussing the remaining changes to the new FAR-BAR contract will be posted shortly.
If you have questions or are looking to speak with experienced real estate lawyers in Miami-Dade or Broward County, contact ESQ.title at 305-501-2836 or visit us at JordanPascale.com.