Summer will bring one small change to the Agreement of Sale and more work for task forces.
At the Spring Business Meetings, held June 4-6, the Standard Forms Feedback Panel and Committee met to review proposed changes for addition to the standard forms library and some past changes, too.
The committee approved one small change to paragraph 8(I) of the Standard Agreement for the Sale of Real Estate (Form ASR), which applies only to VA and FHA financing. As of July 1, you’ll see an additional checkbox in the “buyer’s acknowledgment” stating that the buyer will agree to perform any improvements required by the lender. This is required language for lenders processing FHA 203(k) loans and comes directly from the underwriters’ handbook. This will be the only change for this year; the committee, after reviewing feedback and commentary on Paragraphs 13 and 14 which were revised earlier this year, decided to leave the changes implemented in January in the Agreement as there was no indication of a major upheaval in the marketplace or significant consequences as a result.
The feedback panel previewed changes that are being proposed by the SPD task force and the Smart/Green Technology task force. The SGT task force is suggesting small changes to the employment forms and the Agreement of Sale, plus one new form which will be an addendum dealing with the transfer of smart home devices.
The language being proposed for addition to all of the buyer agency contracts is:
RECORDINGS WITHIN THE PROPERTY. Buyer should be aware that a seller may have a security system or other devices that record or allow for remote monitoring of the seller’s property, including broadcasting or recording video and audio. A seller may be able to listen to conversations held on their property and Buyer should be aware that any discussions, including discussions of negotiation strategies, held in the property may not be confidential. Buyer hereby releases Broker, Broker’s agents and Broker’s employees from any liability which may result from any recording in the property.
A similar paragraph will be added to all of the listing contracts, with one additional provision warning sellers as follows:
In the event Seller has a recording system in the Property which records or transmits audio, Seller understands that recording or transmitting audio may result in violation of state or federal wiretapping laws. Seller hereby releases and indemnifies Broker, Broker’s designated agents, subagents, sales associates and employees from any liability which may result from any recording or transmitting in the Property.
You can review the new form created by the SGT task force, proposed Form IOT, online.
The SPD task force has focused their work on the content of the form, rather than the format, and has made suggested improvements to most of the paragraphs contained in the Seller’s Property Disclosure Statement. You can review the draft changes to the SPD online.
Both groups have yet to finalize their suggestions, and the earliest you would see any of these updated forms in publication is Jan. 1, 2020.Comments on the proposed forms can be sent to me, which will be forwarded to the appropriate task force at their next meeting.