Changes to the 2015 Georgia Realtor Forms
Did you know that the real estate contracts used by most agents in Georgia change every year? Sometimes there are big changes, sometimes small changes – but every year without fail there are changes. So if you purchased a home five years ago, say, the process now is a bit different than it was then. The biggest change in recent years was the change from an “inspection period” to a “due diligence” period. With an inspection period, the buyer had to find a “material defect” in the property that the seller would not fix in order to get out of the contract. As you might imagine, that resulted in a lot of legal wrangling over what constituted a “material defect”. So the Georgia Association of Realtors forms committee changed the contracts so that the “norm” now is the due diligence period, also called a “free look” provision. During that period (typically anywhere from 7 to 14 calendar days) the buyer can terminate for any reason or no reason at all and get their earnest money back.
This year the changes were not quite as sweeping as that recent change, but there are changes; if you are selling or buying a house this year, you’ll want to know about them. In the basic purchase and sale provision, GAR added a “special circumstances” provision that alerts the buyer that the seller must get third party approval before they are able to convey the property. The categories of prior approval include: (1) approval by a bankruptcy court; (2) approval by a judge in a divorce proceeding; (3) approval by a lender in a short sale proceeding (when the sale of the property will not generate sufficient proceeds to pay all mortgages and liens against the property); and (4) other instances when the seller does not yet have title to the property, such as in an estate situation.
There are consumer brochures Realtors are encouraged to share with clients and which are mentioned in the Brokerage agreements, designed so that consumers are getting pertinent warning information. If you are not provided them, you will want to ask for them: Protect Yourself When Selling a House, Protect Yourself When Buying a House, and Protect Yourself When Buying a Home to be Constructed. There are brochures covering the hazards of lead based paint and of mold, and about purchasing a home in flood plain or a short sale or distressed property. Finally, there are two new brochures: What to Consider When Buying a Home in a Condominium and What to Consider When Buying a Home in a Community with a HOA (homeowners’ association).
Bruce Jenner would be happy to know that in the various agreements that address potential discrimination, “gender identity” has been added to the list. Previously, the “protected category” list consisted of race, color, religion, national origin, sex, familial status, disability, and sexual orientation. What this means is that brokers, agents, and owners of properties are prohibited from discriminating against potential purchasers on the basis of any of these categories – which now include gender identity.
There are numerous other small changes. One particularly interesting tidbit is that there is now “stated consideration” for the due diligence period. In previous years, attorneys argued that the purchase and sale agreement’s due diligence provision did not create an enforceable contract because there was no consideration paid by the buyer for the privilege of holding the property under contract for a period of time with no obligation to buy. The contract now states that the Buyer will pay the seller ten dollars for this “option” period. In practice, the ten dollars NEVER CHANGES HANDS, but the recitation makes the provision enforceable.
You won’t be surprised that I recommend you consult a licensed Realtor (like myself) for a full explanation of the changes and intricacies in the GAR forms. While I am of the opinion our state’s forms and contracts are some of the best and user friendly in the nation, you should always have expert professional advice in your home purchasing and selling decisions.
Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: email@example.com.