As you know, twice each year CAR releases revised and new documents for our use. The next release will be on November 26 and will include a number of regularly used documents and some very nice changes. Below are some highlights:
1.     On the Counter Offer form (Form CO), they have added paragraph 1C as follows: “If checked, Buyer’s deposit will be adjusted in the same proportion as in the original offer.” As you will recall, in the prior versions of this document, only the down payment and loan amount were adjusted in the boilerplate. This change includes the deposit, and would thereby keep it at 3% of the new purchase price if the original offer included a 3% deposit. As the listing agent, you should always check this box.
2.     In the Commission Agreement (Form CA), CAR added a line in paragraph 1 setting forth a date by which the subject property must be sold in order for the commission to be earned. This is a good change as it adds clarity to your agreement, but you need to be sure to fill in the blank in every instance. Forgetting to add a date will only add ambiguity to your contract and leave the client with an argument to try and avoid payment.
3.     The Receipt for Increased Deposit (Form RID) will now be known as the Increased Deposit/Liquidated Damages Addendum (Form IDA) and now reflects the possibility that an increased deposit may be wired directly to escrow. It also adds a check box next to the Liquidated Damages clause, allowing you to once again acknowledge that the new deposit money is part of the potential liquidated damages.
4.     The Contingency for Sale or Purchase of Other Property (Form COP) clarifies the parties’ rights should the buyer’s present home fall out of escrow. Specifically, a sentence was added which provides that if the buyer’s sale escrow cancels after the buyer has removed his COP contingency, only the seller has the option to cancel the agreement. By removing that contingency, the buyer loses her cancellation rights even if the sale of her home doesn’t close.
5.     CAR created a Trust Listing Agreement (Form TLA), which is a regular listing agreement except that the signature lines reflect that the property is held in trust. Of course, you should use this form when your seller is a trust.
6.     Finally, CAR has separated the clauses from the Purchase Agreement Addendum (Form PAA) to create separate forms that can be used in the appropriate circumstances. For example, there is now a separate Back-Up Offer Addendum (Form BUO), Seller in Possession Addendum (Form SIP), Tenant in Possession Addendum (Form TIP), Court Confirmation Addendum (Form CCA), and others. These new forms are not substantively different from the corresponding clauses in the old PAA, but are easier to use because they are only one page long.
Of course, there are other new or revised forms being released next month. If you want to review them all, go to CAR’s website, car.org, the following link: http://www.car.org/legal/standard-forms/summary-forms-releases-chart/november2012formreleases/
As always, let us know if you have any questions.