Agreement of Sale to be Updated July 1
No form in the PAR library is amended as frequently as the Standard Agreement for the Sale of Real Estate, Form ASR.
Several of the most recent changes were made without an accompanying change to the other sales agreements in our repertoire. Now beginning July 1, all of the agreements should have the following elements to them, where applicable:
- Fixtures and personal property – a note about fixtures and the lists of inclusions, exclusions and items subject to financing arrangements should be similar.
- Inspection limitations and reports – all contracts should have the standard language limiting the scope of a pre-settlement walkthrough inspection and people who may attend the inspections. Also, the language that the buyers will provide inspection reports to the sellers in all circumstances has been added.
- Internet of Things and recordings – all agreements (except for vacant land) should contain a paragraph on the Internet of Things (IoT) and connected devices.
There will also be two new changes to – what else? – Form ASR (and the other sales agreements, of course). Though small, these changes are quite important because they impact the rights and remedies available to your clients under the contract. The first change will affect the buyer’s rights if the seller is unable to transfer anything less than full title. As the form is currently written, if the seller is unable to transfer “good and marketable title” then the buyer’s only option is to terminate the contract; as of July, the buyer will have an additional option of taking “such title as Seller can convey.” This will allow the buyer to choose between taking less-than-perfect title and terminating the agreement.
The second change is to the paragraph of the agreement addressing mediation. Mediation is the preferred method of settling disputes between buyers and sellers, but while the parties wait for the process to take its course the aggrieved party might be running out of valuable time to preserve rights available to them under contract law. The new language gives either party permission to file whatever claims may be necessary in an appropriate court of law while mediation takes place.
Therefore, the following forms will be updated as of July 1:
- Agreement for the Sale of Commercial Real Estate (Form ASC)
- Standard Agreement for the Sale of a Manufactured Home on Leased Land (Form ASMH)
- Standard Agreement for the Sale of New Construction (Form ASNC)
- Standard Agreement for the Sale of Real Estate (Form ASR)
- Standard Agreement for the Sale of Vacant Land (Form ASVL)
- Transaction Licensee Contract (Form TLC)
- Oil, Gas and/or Mineral Rights Addendum to Agreement of Sale (Form OGM)
- Oil, Gas and/or Mineral Rights/Interests Disclosure (Form OGMD)
To view the redlined samples, be sure to be logged into the PARealtors.org website and visit the individual form pages. Then click on “view the redlined version” under the download button.