Writing a Special Stipulation In a Nutshell

Special Stipulations are specific instruction written into a contract that are unique to this buyer and seller and are in addition to the standard contract form. A Special Stipulation controls if it conflicts with any preceding exhibit, addendum or paragraph.

Special Stipulations aren’t hard to write.  Here’s the nutshell: Include who, what, when, and result.
 
The devil is in the details. The what needs to be clear and specific. It may include several points of information. For example, the cost and who pays (warranty). The type of termite bond (repair or retreat?) The result or consequence of not doing the what (right to terminate or the right to extend or the right to renegotiate). 
 
When you are writing your stipulation, review to be sure you’ve included the 4 core sections: Who, what , when and result.  Then make sure you’ve supplied the necessary details.

• Always be as specific as possible, especially when it comes to dates, amounts and actions required of either party. If you do not, then the stipulation may not be enforceable. 
  
• Never say "to the buyer's satisfaction". What does that mean? What if the buyer is never satisfied? Then what? 
  
• Never include phrases such as TBD, actual costs, negotiable, etc. 
  
• Never “request” an action. (Purchaser requests that the seller leave the swing set.) The other party can ignore a request.  Use clear and precise language: “Swing set to remain.” 
  
• If in doubt, ask your broker or attorney for help with the stipulation. 
  

 
Let’s look at a few common stips as examples of who, what, when and result:

1. Termite Report - GAR SS 330: 
   

Prior to ________________, (when) Seller shall provide (who pays) Buyer with an Official Georgia Wood Infestation Report (“Report”) from a licensed Georgia pest control operator dated subsequent to the Binding Agreement Date which covers all dwellings and garages located on the Property (what). In the event the Report reveals any active infestation from termites or the other wood destroying organisms listed in the Report, Seller agrees to have the termite company issuing the Report treat the infestation in accordance with the standards set forth by the Georgia Department of Agriculture (result). 

1. Home Warranty: Seller (who) to provide (who pays) at closing (when) a 1 year home warranty, including appliance coverage, from Buyer’s choice of warranty company at a cost not to exceed $500.00 (what).  Home Warranty to be ordered by selling agent. (2nd who)
   
2. Amendment to Address Concerns:  Seller (who) to repair the roof (what) and to provide a transferable warranty by 10 days prior to closing (when).  If the repair is not completed in a timely manner, Buyer may terminate without penalty (result) all funds to be refunded to Buyer.  (The buyer or seller may not have the right to terminate if the stipulation doesn't specifically say they do.)
   

 
We are fortunate in Georgia to have an extensive set of Forms, Exhibits and Special Stipulations written and vetted by the Georgia Association of Realtors.  Next week the Broker Corner will explore specific exhibits and special stips that protect your clients and protect you, too!​