As of April 4th of this year, the Florida FAR/BAR contract 4/17 has made some critical improvements to the specifications for contracts regarding the sale and purchase of residential property. In this post, we will highlight the most noteworthy changes with the intent of allowing individuals to better understand and recognize how both buyers and sellers are benefitted by the new terms.
First to note is the new terminology—replacing the phrase ‘loan commitment’ with the term ‘loan approval.’ This is important to recognize, as banks rarely issue loans for commitments and instead prefer to use the ‘conditional loan approval’ language on the form. This helps both buyers and sellers better understand the conditions that govern their contract. In addition, buyers’ task list for their loan approval process are more clearly defined. The loan approval timeline and process have been more clearly explained, as well as the trigger for the refund of the escrow deposit.
In addition, the closing agent is now authorized to release preliminary and final closing disclosures to the seller and the listing agent. The new contract also better explains what a municipal lien search is and that those terms searched will be an exception to the title policy, unless the municipal lien search is ordered by the buyer. The seller must also provide the buyer with any information or plans they may have regarding open permits or improvements on the property. The seller is also required to provide proof of closure of open permits.
With these changes, however, the revisions most beneficial to the buyer concern code violations and open permits. The seller is required to ensure that no facts materially affecting the value of the Real Property which are not readily observable and which have not been disclosed to the buyer shall be noted in the Seller Disclosure. The buyer may also have an inspection and examination of records and documents that pertain to whether or not any open or expired building permits or unpermitted improvements to the Property—also known as the Permit Inspection. During the inspection period, the buyer shall deliver written notice to the seller of the existence such permits. If the buyer’s Permit Inspection identifies permits which have not been properly closed or not permitted, the Seller shall deliver to the buyer all plans, documentation, or other information in the seller’s possession relating to the property.
We conclude with the understanding that these changes seek to assist buyers in recognizing the potential issues that may arise during the purchase of residential property, such as open permits which were previously not a ‘lienable’ item under Chapter 159. This was troublesome, as violations and fines often result in liens from expired permits. The revised FAR/BAR contract 4/17 has better clarified some prior unclear parts of a real estate transaction. For more information about these changes, or to contact a real estate attorney to assist you with your next real estate matter, please click on our contact link and connect with our attorney so we can assist you with real estate needs.