(4) PAYMENT OF EARNEST MONEY SECTION REVISED
The earnest money section of the 2013 GAR Purchase and Sale Agreement was revised to make it easier to reflect earnest money being paid after the Binding Agreement Date. There are three options for paying earnest money in the 2013 GAR Purchase and Sale Agreement:
(a) $_______________________ as of the Offer Date;
(b) $_______________________ within _______________________
dates from the Binding Agreement Date;
(c) _________________________________________________________
BLANK LINE TO BE FILLED IN BY THE PARTIES
The first line is filled in if earnest money is being paid along with the offer. The second line is filled in when earnest money is being paid after the Binding Agreement Date. The third line has been left blank to address any special situations regarding the payment of earnest money. Of course, if earnest money is being paid at two different times more than one line can be filled in.
(5) SECTION ON DUE DILIGENCE PERIOD REVISED
The Due Diligence Section was revised in two important ways. First, on the front page of the GAR Contract there is now a blank stating the length of the Due Diligence Period. Second, the section of the Due Diligence Period now states that the buyer is purchasing the property “as-is” if no Due Diligence Period is provided for on the first page of the contract. If the property is being sold “as-is” not subject to a Due Diligence Period, the best way to fill out the length of the Due Diligence Period on the first page of the 2013 GAR Contract is to simply write “N/A” in the blank.
(6) INITIAL BLOCKS ADDED TO THE FIRST PAGE OF THE CONTRACT
For the first time ever, the 2013 GAR Contract will feature initial blocks at the bottom of the first page of the contract. Initial blocks were not added to the other pages of the 2013 GAR Contract because the other pages are essentially boilerplate. Initial blocks should help prevent the first page of the contract from being altered without the knowledge of a party. However, initial blocks only protect a party if the initials are filled in. Therefore, REALTORS should use care to ensure that the first page is initialed. While the failure to fill in initial blocks should not in and of itself render a contract void, it could result in a court not enforcing a contract if there is evidence that pages were substituted and the buyer never saw the disputed first page.
With so many of the business points in the contract now being on the first page, some REALTORS have already asked whether they can propose an amendment to the contract by just substituting the first page of the contract. For three reasons, my recommendation is for counteroffers to continue to be made using the GAR Counteroffer form. First, simply substituting the first page of the contract with different terms is not necessarily a clear expression of an intent to amend the contract. Second, if there are multiple substitutions of the first pages of the contract as part of a lengthy negotiation of a real estate transaction, the order of sequence of the negotiations may not necessarily be clear, making it hard to determine the intentions of the parties in the event of a dispute. Third, trading only the first page of the contract can lead to confusion over whether, when and how each party ultimately agreed to the final contract. This is because a signature of a party to the contract can reflect consent to an earlier version of the contract as well as to the version of the contract ultimately agreed upon by the parties. Using the Counteroffer form tends to eliminate these potential problems. Of course, if parties ignore my advice (as they sometimes will do) and parties substitute a new first page of the contract to reflect an agreed upon amendment, each party should initial the first page of the contract and initial and time date any signature they have previously written on the signature page of the contract to avoid questions as to whether they agreed to the contract.
(7) SURVEY SECTION OF THE CONTRACT CLARIFIED
One issue that has periodically arose with the GAR Contract relates to title objections identified on a survey provided by the seller to the buyer in entering into an initial contract. Some sellers have argued that if a title objection is shown on the survey that is a part of the contract, the buyer should not then be able to raise such a title objection prior to the closing because he or she has accepted the property subject to the title objection. So, for example, under this argument, if a buyer were to receive a survey showing that a neighboring owner has an easement of access across the rear of the buyer’s property, the buyer would have accepted that condition and not be able to raise it as a title objection.
While this is an interesting argument, it is not what was intended by the GAR Forms Committee. Instead, just the opposite was intended and the GAR Forms Committee wanted buyers to have the right to raise title objections shown on a survey even when the survey is made a part of the purchase and sale agreement.
14 I GEORGIA REALTOR JANUARY I FEBRUARY 2013
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