Common real estate legal questions

For this week’s Broker Corner, we are showcasing some common legal questions that come up again and again.  Thanks to GAR Legal FAQs for this inspiration!
 
Does a real estate purchase agreement automatically terminate if the buyer does not show up for the closing? 
No, unless the contract specifically provides otherwise. When a party fails to perform under a contract, the contract is terminable due to the breach by that party but is not automatically terminated. For the contract to be terminated, a formal notice of termination must be sent to the breaching party.

Can one spouse sign a contract for another spouse?
No. In Georgia, a person cannot sign a contract for another person unless they are legally authorized to do so. Being married does not give one spouse the legal authority to sign for the other. If a person wants to grant the person’s spouse the right to sign a contract on his or her behalf, he or she would need to sign a power of attorney granting that right.
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Is there any consumer protection law for a property purchase agreement where a buyer has a few days after signing a contract to terminate it? 
With one exception, the answer to this question is no. However, the initial sale of a
condominium unit in Georgia is subject to a 7 day right of rescission on the part of the buyer commencing from the date that a binding contract is created and an acknowledgement is signed that they buyer has received the condominium disclosure package. (See O.C.G.A. § 44-3-111.)

​Is a contract enforceable if the parties agree that the earnest money will be zero ($0) dollars? 
Yes. While there must be consideration for a contract to be enforceable the consideration can be the mutual promises of the parties to perform their respective obligations under the contract.
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Can a party withdraw an offer to purchase or sell property even though the party agreed that it would remain open for a specified period of time? 
The general answer to this question is yes. A person making an offer or counteroffer can normally withdraw it at any time prior to it being accepted and returned to the party who made the offer. An exception to this rule, however, would be an option contract, where a party pays money or some other valuable consideration for the right to buy a property on set terms during a specified period.

What is the difference between the “Acceptance Date” and the “Binding Agreement Date” in the GAR form contracts? 
The Acceptance Date is the date that the party who has been presented with an offer or counteroffer signs and accepts it. However, a legally enforceable contract is not created until the accepted contract is then delivered back to the party who made the offer or counteroffer. The date this party (or the party’s broker if the broker is representing the party as a client) gets back the accepted contract is the Binding Agreement Date.

Can an offer be accepted after the time limit of the offer has expired? 
When a party accepts an offer after it has expired, and returns it to the party making the offer, it is technically a counteroffer rather than an acceptance. However, there is case law in Georgia which provides that if the counteroffer is then not signed, it can still be held to be an enforceable contract if both parties proceed in reliance on the contract as if it is in full force and effect.

Can members of the military get out of their leases if they are transferred to another party of the country? 
The answer is yes under both federal and state law. Under state law, if a member of the military enters into a residential lease for occupancy by that person or that person’s immediate family and subsequently receives permanent change of station orders or temporary duty orders for a period of more than 60 days, his or her liability is limited. In such cases, liability of the tenant may not exceed 30 days after written notice and proof of re-assignment are given to the landlord, plus the cost of repairing any damage caused by the act or omission of the tenant. (See O.C.G.A. § 44-7-22) Under federal law, a person who enters into a residential lease and thereafter enters military service may terminate the lease at any time after his or her entry into military service. If a member of the military enters into a lease while they are already in the military, and then receives either permanent change of station orders, or a temporary assignment elsewhere for a period of not less than 90 days, he or she may terminate the lease. Such termination will also terminate any liability on behalf of any co-tenant under the same lease. (See 50 App. USCA 534.)

Must a Listing Agreement include an expiration date and is there a limit on the term of a brokerage relationship?
Fixed Expiration Date.                                                                                               
First and most important, it is a violation of Georgia Code § 43-40-25 and the Unfair Trade Practices Rule 520-1-.06 to fail to include a fixed date of expiration in any listing agreement. We at RMAA check every listing agreement for a valid start date and expiration date. The Georgia Real Estate Commission will issue a citation for failure to include an expiration date.
Length of the Term.                                                                                                                      
How long the term is, however, can be as long as the parties want.  Therefore, a seller could sign a seven year listing agreement. If the Georgia license law is violated and the agreement is silent on its duration, then the law looks to the Brokerage Relationship in Real Estate Transactions Act (“BRRETA”). Specifically, BRRETA provides that if no expiration is provided, the agreement terminates “one year after initiation of the engagement.”  
                                                                                       
Renewable Brokerage Agreements.     
There is legal argument regarding the expiration of a renewable brokerage agreement. To be safe, REALTORS® wishing to avoid arguments on this point should always, include an outside date of expiration even when there is an automatic renewal provision. So, for example, a listing would provide that it is for an initial term of one (1) year and shall automatically renew for successive one (1) year terms unless either party notifies the other not less than thirty days prior to the end of a renewal term. However, the agreement should, for example, then provide that notwithstanding the above, the agreement shall end five (5) years (or whatever specific period is agreeable) after the date it was entered into. In this way, the agreement has an absolute fixed date of expiration.