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February 2016
Welcome to this month's edition of the McManamy McLeod Heller, LLC monthly newsletter. Each month we share important information for the serious real estate professional. You can rely on MMH to update you on current changes in real estate law that will impact your business and to offer you practical ideas on how to provide your clients with the best customer service in town.
This month's topic is a synopsis of the 2016 Revisions to the GAR Real Estate Forms.
2016 Revisions to the GAR Real Estate Forms
1. GAR FORM F50, SELLER'S PROPERTY DISCLOSURE STATEMENT
- No longer a question regarding low-flow toilets in the subject property.
- No longer a question regarding the condition of the heating and/or air conditioning systems in the subject property; only asks whether any part of the heating and/or air conditioning systems need repair or replacement.
- Seller's Property Disclosure Statement has been reformatted for easier understanding.
- The "Do Not Know" option was eliminated from the form.
- Seller's Disclosure explains to buyers that caveat emptor (or buyer beware) is the law in Georgia and that buyers should carefully inspect the subject property prior to purchase.
2. REVISED GAR FORM F64, FINANCING CONTINGENCY EXHIBIT
- Elimination of the buyer's obligation to apply for a mortgage loan within a set number of days from the Binding Agreement Date.
- For REALTORS® who still want to establish a prescribed number of days for the Buyer to apply for the mortgage loan, there are two special stipulations that can be added.
- The buyer now has seven (7) days from the termination of the Purchase and Sale Agreement to provide the seller with a letter of loan denial, even if the termination is on the last date of the Financing Contingency.
- The new Financing Contingency Exhibit also states that the loan denial letter must be from the same lender and for the type of loan which the buyer first agreed to apply.
3. CHANGES TO GAR FORM F20, PURCHASE AND SALE AGREEMENT
- The number of days that the contract can be unilaterally extended was changed from seven (7) to eight (8) days.
- The buyer and seller both consent, as part of the Purchase and Sale Agreement, to the closing attorney preparing and distributing to all parties in the transaction and their brokers, an American Land Title Association ("ALTA") Estimated Settlement Statement.
- Section B8 of F20 was modified with the word "unexpired" to clarify when the buyer is entitled to a return of his/her earnest money. Now, if the contingency in question has already expired, it no longer applies to the transaction at hand.
4. REVISED FORM B2, PROTECT YOURSELF WHEN BUYING A HOME
- Now includes a provision to warn buyers about scams involving a false set of wiring instructions regarding where to wire funds to purchase property.
- Buyers involved in this scam wire their down payment funds to fraudsters where it is incapable of being recovered. **Buyers should always check with the closing attorney when they receive any wiring instructions.
- The brochure also warns buyers about companies who send offers to obtain a recorded copy of their new deed for a fee. Closing attorneys provide buyers with a copy of the recorded deed at no additional cost after it's been filed with the proper agencies.
5. NEW BROCHURE: GAR FORM B8, WHAT NEW LANDLORDS NEED TO KNOW ABOUT LEASING PROPERTY
- A new brochure for property owners who intend to lease their properties. Some of the topics included in the brochure are as follows:
a. Confirm that leasing is permitted.
b. Conduct a thorough background check of the tenant.
c. Fair housing laws apply to rentals.
d. Have a written lease.
e. Evicting a tenant is not necessarily a quick process.
f. Possession of the property belongs to the tenant.
g. Be careful in selling a leased property to a tenant.
h. Contractors performing work on property should be insured.
i. Landlords need special insurance.
j. Follow all Georgia mandated procedures applicable to landlords.
6. NEW FORMS: GAR FORM 142 & 148, CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
- The Confidentiality Agreement, GAR Form F142, ensures that both offers and counteroffers are kept completely confidential by the buyer and the seller.
- The Confidentiality and Non-Disclosure Agreement, GAR Form 148 is to be used mostly by commercial sellers who want to keep confidential the information about the property and/or business being sold.
7. GAR FORM C010, BROKER TO BROKER REFERRAL AGREEMENT
- The Referral Agreement (Broker to Broker) now states that the broker to whom the transaction was referred will share any monetary bonus with the referring broker.
- Also states that the referral agreement ends after a specific number of transactions that the referring broker has completed with compensation.
8. NEW FORM: GAR FORM F13, AGREEMENT TO WORK WITH TENANT AS A CUSTOMER- New customer agreement that can be used with tenants.
- The tenant is agreeing to limit any damages or claims against the REALTOR® to the real estate commission actually paid to the REALTOR®.
- If no commission is paid, the damages claim is limited to $100.
- Also contains an arbitration provision which keeps any disputes out of the courts.
9. GAR FORM F76, REMINDER OF IMPORTANT DATES IN PURCHASE AND SALE AGREEMENT- This document is a valuable tool for agents not to miss or forget important deadlines.
10. REVISED GAR FORM F124, BINDING AGREEMENT DATE NOTIFICATION
- This form now defines the Binding Agreement Date as "the date when a party to this transaction who has accepted an offer or counteroffer to buy or sell real property delivers notice of that acceptance to the party who made the offer or counteroffer in accordance with the Notices section of the Agreement."
- Binding Agreement Date may be filled in by someone other than a party to the transaction.
- The buyer and seller may sign that they are in agreement with regards to the Binding Agreement Date.
- New language incorporating the Binding Agreement Date into the Agreement and stating that it shall control over any conflicting Binding Agreement Date elsewhere mentioned.
11. REVISED GAR FORM F3, AUTHORIZATION TO SHOW UNLISTED PROPERTY
- This form is now applicable to both the sale and lease of property.
12. NEW FORM: GAR FORM F24, CONSTRUCTION EXHIBIT
- Much of this form is already included in the New Construction Purchase and Sale Agreement, GAR Form F23.
- This form can be used with non-GAR new home contracts.
Hopefully, the changes which have been made will help protect REALTORS® and get transactions closed. REALTORS® with ideas for changes are encouraged to submit them to the Committee for consideration.
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Thank you for taking the time to read our newsletter.
Next month we will discuss the importance of understanding Megan's Law in your state.
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