The intention of the GAR Forms Committee on this point was clarified by adding the following sentence to the end of Paragraph 6(c) of the GAR Contract: “Matters revealed in any survey including a survey attached hereto may be raised as title objections.”


 


(8) RISK OF DAMAGE TO PROPERTY SECTION REVISED
One of the thornier issues in the GAR Contract has always been who pays for damage or repairs to the property arising after the end of the Due Diligence Period but before the Closing. On this point, the GAR Contract has always provided that the Property would be in the same condition on the date of closing as it was on the Binding Agreement Date, normal wear and tear excepted. In the 2013 GAR Contract, the phrase “normal wear and tear” was deleted from the GAR Contract. Here’s why.


Let’s say that a very old heating system in a house works fine through the end of the Due Diligence Period and then breaks before the closing. Most REALTORS have always assumed that the seller is responsible for repairing the heating system as part of the seller’s obligation to keep the property in the same condition on the date of closing as it was on the Binding Agreement Date. However, when the contract included an exception for “normal wear and tear”, the seller could argue that he or she had no obligation to fix the heating system since it would be “normal wear and tear” for a very old heating system to break. After discussing at length who should bear this risk, the GAR Forms Committee reached the conclusion that the seller should be responsible for such repairs. As a result, the normal wear and tear exception was deleted from the 2013 GAR Contract.


 


(9) 15 DAY LETTER BECOMES A 10 DAY LETTER ON DISBURSING DISPUTED EARNEST MONEY
One option that the Holder of earnest money has when there is a dispute over earnest money is to disburse the earnest money based upon a reasonable interpretation of the Contract. As a precondition to making such a disbursement, the GAR Contract has always provided that the Holder send the parties what has become known as a 15 day letter stating as to when and why the disbursement will be made.


This requirement has been in the GAR Contract for so long that many REALTORS mistakenly believed it was a requirement of the Georgia Real Estate Commission (when in fact is it not). In the 2013 GAR Contract, the requirement for a 15 day letter was reduced to a 10 day letter. This change was made to reflect that we now live in a world where there is an expectation of more rapid communication. Some buyers have complained that the process for disbursing earnest money back to the buyer took too long in cases where the seller’s objection to the disbursement lacked merit and effectively prevented many buyers from pursuing the purchase of a house (because of a lack of funds to make a second earnest money payment). Reducing the time period for sending a disputed letter from 15 days to 10 days should help this problem somewhat. Of course, if the Holder of the earnest money is a real estate broker, the broker must still confirm that any earnest money check has cleared before refunding it to the buyer.


 


(10) ACCEPTANCE OF EARNEST MONEY BY SELLER ELIMINATES CLAIMS AGAINST BROKERS
The GAR Contract always provided that if a seller accepts and cashes a check for disputed earnest money from the Holder, any claims of the seller against the buyer are released. In the 2013 GAR Contract, this release language has now also been extended to cover all claims of the seller against both the buyer and the real estate brokers in the transaction. This change was made in an effort to give real estate brokers greater legal protection.


 


(11) UNREPRESENTED PARTIES NOW REQUIRED TO GIVE AN ADDRESS TO RECEIVE NOTICES
The 2013 GAR Contract now requires an unrepresented party to provide some means of receiving notice. This can be a FAX number, an e-mail address or a physical address. This change was made because under the GAR Contract, only a real estate licensee who is representing a party as a client can accept notice on behalf of the client. If the party is not represented, the real estate licensee cannot accept notice on behalf of him or her. Therefore, the GAR Forms Committee wanted to ensure that there was some means of formally notifying an unrepresented party.


 


(12) E-MAIL NOTICE GIVEN GREATER SIGNIFICANCE
The 2013 GAR Contract was revised to provide that “if the sender of a notice by e-mail receives an automatic reply indicating that the e-mail has been opened (“Read Receipt”) the e-mail notice shall be deemed received at that time”. This change was made to reflect the practical reality that notices sent by e-mail are increasingly being used by REALTORS and their clients and customers.


REALTORS should be aware that the Read Receipt option will only work if the sending and receiving computers are using the same e-mail service and the Read Receipt option is available and has been enabled.


www.garealtor.com GEORGIA REALTOR I 15

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