The 2022 Contract and Forms Committee Chaired by Pam Roberts worked really hard last year on many changes. They considered a lot of member feedback and requests to come to the final document updates. They reconvened to reconsider DR feedback, and then again for Board of Directors insight. The final revisions will be released at the beginning of next week to all of our forms providers (each take a different amount of time to update). We ask that you keep an eye out an UPDATE your forms templates to include the latest version. Note that they are area also pulling the Income Property Rider for revisions to conform with state law. In the interest of forms software issues, and to make sure everyone is using the same documents, we prefer not to make more than one change in any calendar year unless there is a compelling legal reason to do so. We still welcome your input though, so send it along (or email Sandy)! Here is a summary of the 2023 changes:
Purchase and Sale Updates
- CLOSING DATE: Add: “Should the BUYER wish to specify a location outside of the county in which the property is located, the BUYER shall assume all costs associated with actual electronic and overnight mail delivery of documents.”
Rationale: Language provides buyers the right to close out of town, but acknowledges the obligation to pay additional costs associated.
- APPLICATION DATE: Struck “and/or Insurance Application Date” from 5.2. Also, from paragraph 7 strike “or (b) make a good faith insurance application by the Insurance Application Date”
Rationale: Insurance applications are not universally known or provided by carriers, unlike mortgages. The important insurance contingency date is still there, the time for the buyer to either establish insurability or withdraw without penalty, but the application date step is removed.
- INSPECTION CONTINGENCY: Add “sewage disposal” after septic system.
Rationale: While all types of inspections are covered in the general terms, the committee agreed that a specific mention of sewage as well as septic is valuable.
- FIXTURES: Add “television mounting hardware” to be included in the sale
Rationale: Based on feedback from committee members and attorneys, this has been a last-minute issue that can be cleared up simply with a mention in the agreement.
- EXTENSION: Add the words “marketable and insurable” before title and add “from closing date” to the 30-day extension time frame.
Rationale: To ensure an automatic extension is limited only to title defects and not encumbrances or other matters identified in paragraph 16. It also seeks to clarify the extension is from the closing date, not when the title defect is first known.
20. LEAD LAW: The paragraph has been split into two, so the “Should the BUYER receive an unsatisfactory lead inspection” sentence … becomes a new paragraph.
Rationale: When Buyers or their agents are striking the right to inspect or to get out of the agreement for an unsatisfactory lead inspection to align with the Lead Paint Transfer Notification form, they were typically striking the entire paragraph – but the paragraph contains many notices and disclosures that are important and should be retained. This will allow the agents to more easily accommodate the buyer’s inspection wishes without removing all of the disclosure information they need to receive.
Land P&S Updates:
Mirror all recent changes made to P&S as applicable, including the reworking of the underground tank section.
P&S Land Rider:
The Land Rider is to be removed from the Purchase and Sale Land Agreement and will be a separate, stand-alone document that can be used, if desired.
ADD: Checkbox E. Obtaining prior to at BUYER’S sole cost and in good faith, satisfactory information that there are no conservation and/or land restrictions that would impact the Buyer’s intended use of the land.
Rationale: This simply adds a buyer’s ability to check into conservation or land restrictions as part of their due diligence if that is a concern, but like all other options is not required. This is a consumer protection issue to make mention of this type of investigation for the buyer’s consideration when drafting their offer. Like all other facets of the rider, it is negotiable and optional.
- UNIT PLAN: Strike paragraph that reads, “If SELLER’S Deed to BUYER is the first deed of such Unit, SELLER’S Deed shall have attached thereto, as a part thereof, the plan required by Section 9 of the Act.”
Rationale: This is not applicable to most condo sales in Berkshire County and would be handled in other documents if required.
Change the title from 4. CONDOMINIUM ITEMS TO BE APPORTIONED to read 5 CONDOMINIUM ASSESSMENTS TO BE APPORTIONED:
Rationale: Better clarifies the intent of the paragraph
Following the sentence “The conveyance of the premises shall be deemed to include the SELLER’S allocable share of any working capital and other reserve funds held by the organization of Unit Owners add “and shall not be an adjustment of the purchase price.”
Strike “If such funds are held, the amount of SELLER’S allocable share shall | shall not be an adjustment to the purchase price.”
Rationale: This option to adjust a purchase price or retrieve the seller’s share from the organization are not common situations in condo sales in Berkshire County and lead to consumer confusion.
Strike “(b) On or before the Closing Date, SELLER shall provide written verification from the organization of Unit Owners to BUYER of the amount of any reserve fund held by the Organization, and SELLER’S allocable share of each.”
Rationale: The buyer may obtain the financials, minutes and verification of reserves and can get them from whoever the association will release them to, doesn’t have to be from the seller. This may be handled by attorneys, REALTORS and sellers.