Page 15 - Boca Club News - December '21

Boca Club News, Page 15
Legal: Navigating the 2021 Contract Updates

for the Purchase and Sale of Florida Real Estate

By Kristin A. Vara, Esq., an associate as to the ownership of these accessories often resulted in many reasons that all parties should be aware of and always
in Ward Damon, PL, a real estate disagreements between the parties at the last minute. The keep in mind, especially around hurricane season.
and business-oriented law firm newest revision led to all of these items now being a standard Financing. Lastly, the biggest change in the new contract
serving all of South Florida, with inclusion when purchasing a property. That being said, if there was to the area of financing. One of those changes was
three offices in Palm Beach County. are items on or absent from the list that you want to include the elimination of unnecessary language regarding cash
Kristin specializes in residential and or exclude, a real estate attorney can help ensure you do not transactions. The new contract clarifies that if it is a cash
commercial real estate law. She can forego the opportunity to do so. transaction there is no financing contingency. Simply put, if
be reached at (561) 842-3000 or at Post-Closing Occupancy. Can you imagine moving into a Buyer elects to purchase a property in cash when they sign
kvara@warddamon.com. your new home only to have a stranger appear at your door a the contract and later seeks to obtain financing, the Seller is
November 1st, 2021 was an exciting day for the Florida week later saying he rented the property as an Airbnb for the not obligated to allow the Buyer more time than originally
real estate world as it marked the debut of the much- weekend? Well, it has happened before, and it led to another bargained for to secure the financing.
anticipated 2021 Florida Realtors/Florida Bar Contract for big change in the contract regarding the area of disclosures Another important change to the financing section was
the Sale and Purchase of real estate. of occupancy and possession. In recent years, disputes like the new requirement of a satisfactory appraisal before the
What is the FR/Bar Contract? the one mentioned have become more frequent as companies expiration of the Loan Approval Period. If an appraisal
The FR/Bar Contract is the standard real estate contract such as VRBO and Airbnb become increasingly more popular. comes in below the purchase price, the Buyer is often placed
approved by a joint committee of Florida Realtors and the To resolve that issue, the new contract requires that Sellers in the position of having to walk away from the property,
Florida Bar. It is widely used across the State by brokers, disclose whether there are seasonal or short-term vacation renegotiate the purchase price or make up the difference
realtors and attorneys alike and is the form you will most rentals set to take place after Closing. Additionally, there is between the appraisal price and purchase price, since lenders
likely see if you are involved in a purchase or sale of real a rider that addresses specific areas of the contract in more generally will not lend more than the appraised value of a
estate in Florida. depth, that outlines additional Seller obligations and indicates property. Now the Buyer will no longer have to wait extended
This contract is largely regarded as the “go-to” contract whether the Seller is able to enter into additional seasonal or periods of time to know if the property is worth what the
for the purchase and sale of real estate in the State because vacation rentals after the effective date of the contract. lender is lending. Since the appraisal can be a huge factor in
it was crafted with realtors, attorneys and, most importantly, Force Majeure. The state of the world this past year making or breaking a transaction, the revision expedites both
the consumer in mind. It is a comprehensive contract that and a half changed many things – to include the meaning of the Buyer and Seller knowing whether the transaction will fall
contains all the provisions necessary for a standard purchase Force Majeure in many contracts. Force Majeure is a legal apart for this reason and helps avoid spending unnecessary
and sale of property in Florida and has additional riders, or definition that is commonly included in contracts, and that time or money.
addenda, to include property specific issues. provides a safety net for parties in the event an unforeseeable How can I benefit from knowing these changes? Having
What are the important changes I should know about? circumstance prevents one or both parties from being able foundational knowledge in your rights as a Buyer or Seller
The revision was an important update because, within the to fulfill their obligations under the contract. The traditional can be important in determining if a transaction is right for
past few years, Buyers and Sellers alike have experienced definition provided contractual safety for things such as you. For most, buying and selling property is an event that
unique issues that had not previously impacted the real estate hurricanes, floods, earthquakes and fires. The change updated occurs only a few times in your life. This means that for
market. While there were a number of changes made to the this definition to include civil unrest, governmental actions Buyers and Sellers alike, the purchase and sale of property
contract, there are a few key changes that you should keep and mandates, government shut downs, epidemics and can be an overwhelming venture. Having an attorney to help
in mind. pandemics. The amendment also added important additional guide you through the process, negotiate on your behalf and
Personal Property. The first big change to the contract language that states a Force Majeure event will be deemed assist in explaining these important contractual provisions
was made to the definition of Personal Property. The old to have begun on the first day the unforeseen circumstance can alleviate much of the stress surrounding these important
contract was silent as to whether hotly debated items such prevents performance or impacts the availability of services. events.
as thermostats, doorbells, mailbox keys, storm protection In simpler terms, the contract will now halt performance
items, television wall mounts and wall mounting hardware obligations from the day in which the impact of the qualifying
were included in the purchase of a property. The silence unforeseen circumstance is felt. This is a major change for

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