Some of the PAR Standard Forms will be updated on Jan. 1 to accommodate properties that are subject to short-term rentals.
The Short-Term Rental Task Force suggested revisions to the sales agreements and listing contracts, which were approved by the Standard Forms Committee at their fall meeting. Changes to all applicable forms are insignificant compared to some of the changes we’ve seen recently, but are intended to provide important information when a property is occupied by a tenant which may otherwise be lacking.
The changes to the Standard Agreement of Sale (Form ASR) and other applicable sales contracts (Form ASC and Form ASMH) can be found in paragraph 4, dealing with settlement and possession, and paragraph 12, regarding inspections. In paragraph 4, subparagraph (H) currently refers only to leases; it will be updated to refer to short-term rental agreements as well. While a short-term rental agreement could be considered a type of lease, it may not be the type that most consumers think of when reviewing this language with their agent. The task force wanted to clarify that if the property is subject to a short-term rental, that the buyer would be notified of that fact. In paragraph 12, mention of short-term rentals will be made in the “deeds, restrictions and zoning” inspection language to remind buyers that they may want to elect this inspection if they are unsure whether they can use the property as a rental property.
The listing contracts will also have two small changes next year. The first change is the addition of a question in paragraph 1, which asks who currently occupies the property. There is no requirement for the seller to identify tenants by name, but they should provide enough information to at least notify the listing broker that the property is occupied by someone other than the owner. The other small change is found in paragraphs addressing title and possession. While there is already a question asking whether the seller has any state tax liens, the task force recommended a parenthetical which clarifies that this includes sales, use and hotel occupancy taxes.
These updated forms, and others, will be available for use on Jan. 1 from your preferred forms vendor.