Our law firm helps clients and real estate agents protect themselves in the real estate transaction. Below are the top five tips for real estate agents to protect themselves in a real estate transaction:
Permit Closure: The FR/BAR AS-IS Contract does not provide for an obligation of the seller to close out open, expired, or active permits (there is a permit provision in the FR/BAR Standard Contract for the seller’s obligation), and only obligates the seller to cooperate in the closing out of open, expired, or active permits. It is suggested that a specific statement is added to the Additional Terms section of the FR/BAR AS-IS Contract obligating the seller to close out all open, expired, or active permits prior to closing.
Mold Inspection: The FR/BAR Standard Contract does not include a right of the buyer to perform a mold inspection of the property nor does it allow the buyer to obligate the seller to make mold related repairs under the repair limits. It is suggested that the FR/BAR Mold Inspection Addendum be used in all instances to allow for the buyer to inspect and have specific rights related to the discovery of mold in the property.
Statements of Non-Performance: Real estate agents should be mindful to avoid making statements on behalf of their client of non-performance to the other party or real estate agent when their client has advised them that they are not able or willing to perform under a contract. Ultimately, specific statements of non-performance to the other party or real estate agent could trigger the loss of rights that may otherwise be available to their client. It is suggested that a real estate agent direct their client to seek the advice of an attorney should the client not be able or willing to perform under a contract.
Pending Assessments – Condominium Rider: The FR/BAR Condominium Rider includes a disclosure requirement by the seller as to any “pending” assessments, and “pending” means any assessment that was levied by an association or referenced in the minutes of a meeting or in item on an agenda within the 12 months prior to the effective date of the contract. It is suggested that the real estate agent point this 12 month requirement out to the seller during the listing of the property in order to ensure they have reviewed the association minutes and agendas for the 12 months prior, as failure to disclose a pending assessment could obligate the seller to pay the assessment at closing.
Dating Initials: Real estate agents should be aware that including initials without dating them could cause the effective date of the contract to be impacted – as the effective date is the last date both parties sign and initial changes and deliver the final signed contract to the other party. If there are initials added after the first delivery, the effective date may begin before it was required to under the contract language. It is suggested that a real estate agent have all initials dated to ensure the timelines under the contract run from the proper effective date.
© Lawrence Advisory, PLLC (2022)
Comments