2021 Contract Changes Part 2

As noted in last week’s Broker Corner2021-gar-contract-changes-part-1.html, the 2021 GAR contract changes are final.  Last week the changes to the Listing Agreement were summarized. This week we will cover the changes to the Buyer Brokerage Agreement and the Purchase and sale Agreement. For additional detail, please see the RMAA Hub Resources Library for a Power Point of Missy Robinson’ s class on the changes.  The new forms can also be found in the Resources Library.  There will be additional classes on the changes to the forms.  We highly recommend that you register and attend!
 
Important changes to the Buyer Brokerage Agreement:
 

1. The name has been changed to “Exclusive Buyer Brokerage Engagement Agreement.”
2. Independent Contractor has been moved to a definition at C97)(i).  No need to select it anymore.
3. Dual agency is not offered by RMAA.  That has not changed.  If it were offered, there is now a requirement that the Buyer consent to dual agency.  
4. Section B has been expanded to include an acknowledgment by the Buyer that Buyer is not a party to another Buyer Brokerage Engagement and, if the Buyer is a party to a previous agreement or terminated a previous agreement without consent from the previous broker, the Buyer may have to pay the previous broker a real estate commission.  Further, a commission may be due to a previous broker should there be a purchase or lease on a Protected Property during a Protected period.
5. Unilateral Extension of the Buyer Brokerage Term for a period the property was under contract: The Broker must now give notice to the buyer within 5 days of a deal falling through, but, in any event, the notice MUST be given before the Buyer Brokerage expires. 
6. Added under miscellaneous:  Broker has no liability for third party vendors that may have been referred to the buyer.
7. Notice to Extend Listing Period has been renamed to cover all brokerage agreements (Buyer, Seller or Lease).  The new name is “Notice to Extend Brokerage Engagement Agreement.”

Note that there are other miscellaneous changes in the Exclusive Buyer Brokerage Engagement Agreement, including renumbering and content location changes.  Please review the new Agreement before using it.
 
 
Important Changes to the Purchase and Sale Agreement:

1. An option was added for Earnest Money to be via ACH.  However, please check with attorneys if the earnest money will be held by them.  Many attorneys will not accept an ACH payment.
2. Broker Relationships have been changed to “Buyer’s Broker” and “Seller’s Broker.”  The old terminology of Selling Broker and Listing Broker are eliminated.
3. Section B(3)(c).  Sentence added at the end of the paragraph:  Buyer agrees to indemnify Seller against any and all claims of the county for unpaid ad valorem real property taxes for the year in which the property is sold.
4. Language in the Right to Inspect paragraph has been expanded to clarify that the Buyer can inspect with prior notice and at reasonable times.  (This would include tomes after the due diligence period has ended.)
5. Language added to recognize that brokers are express third party beneficiaries to the Agreement. B(10)(b).
6. Language is added that the Buyer is to examine the propensity of the property to flood and flood zone certifications. B(10)(c).
7. Language is changed from damaged to destroyed at (C)(3) : Risk of damage to property
8. Added disclaimer language regarding GAR Forms: “No representation is made that the GAR Forms will protect the interests of any particular party or will be fit for any specific purpose.” C(4)(g)
9. Written representations of the Seller regarding the property or neighborhood will survive the closing.  (Be sure your Seller knows to complete the Seller Property Disclosure correctly!)
10. Language added above the signature lines: “By signing this Agreement, Buyer and Seller acknowledge that they have read and understood this Agreement and agree to its terms.”

 
Note that there are other miscellaneous changes in the Purchase and Sale Agreement, including renumbering and content location changes.  Please review the new Purchase and Sale Agreement before using it.
 
There are miscellaneous changes and updates to the New Construction PSA and the New Construction Exhibit.
 
There are several new forms that are welcome additions to the GAR Forms.  Please review them.

1. NEW! F289 Request for Confirmation of Presentation of Offer/Counteroffer. This is only signed by brokers.  You can use this form if you feel a broker did not present your offer.
2. NEW! F290 Agreement to Reinstate Contract. This form can be used if a contract was unintentionally terminated and the parties want to continue.  The form does not change deadlines, but if changes need to be made to the original agreement, they can be added in Paragraph 2.

 
Next week we will summarize changes to Disclosures, Exhibits and Authorization.