On November 1, 2021, the FR/BAR Residential Contract for Sale and Purchase (the FR/BAR "As Is" Contract) underwent several changes reflecting an intent to level the playing field between buyers and sellers of residential property. In case you missed it, here are some notable changes. PLEASE NOTE: This is NOT a comprehensive or exhaustive view of these changes. The Contract has further updates, new riders, and other changes that you should familiarize yourself with and contact legal counsel for further information.
Section 8(b) – Loan Approval Period
Two tasks must now be completed during this period: The buyer must obtain approval for financing as described in the section (as before) with a new requirement that the buyer’s lender must receive a satisfactory appraisal before the approval period expires. This aims to prevent a low appraisal from ruining a transaction up to and including at the time of closing. It also aims to ensure that the property can return to market much sooner to find a new buyer, should funding fall through.
Make sure you’re ending the loan approval period well before the closing date!
Section 19, Standard O – Delivery Methods
Under the revised contract, methods for delivery notice have changed. They can now be delivered by fax or email, in addition to the by mail or via personal delivery options that remain in place. Other electronic delivery methods have also been deleted, such as text messaging. Texting cannot be used to provide notice under this new contract! They are unreliable in terms of providing evidence that a notice was delivered by erasure or tech ‘fails.’
Other Notable Changes Include, but are not limited to:
The definition of "Personal Property" now includes thermostats, doorbells, TV mounting hardware, and storm protection items.
FIRPTA withholding and reporting costs have been added as an item to be paid by the seller.
- The definition of closing now includes that "all funds required for closing are received by the closing agent and collected pursuant to STANDARD S".
- And of course, due to our new way of life in a pandemic, STANDARD G -Force Majeure has been revised to include "governmental actions and mandates, government shutdowns, epidemics, or pandemics."
- Along with these changes, there have been several updates and additions of new riders including Mold Inspections, Seasonal/Vacation Rentals/Pace Disclosure Riders, and others. Please keep in mind that this list is an overview of changes and NOT a comprehensive list. Should you have any questions on the contract, please contact legal counsel for advice.