November is here, and this year, in addition to bringing some long overdue fall-like weather to Florida, it’s also bringing several pretty big changes to the FAR-BAR. As a Central Florida real estate attorney, I’m never farther than an arm’s length from a FAR-BAR contract. However, for those of you who don’t live and die by the FAR-BAR, like I sometimes do, the Florida Realtors/Florida Bar Contract for Sale and Purchase (“FAR-BAR”) is a standard form purchase and sale agreement developed via the collaborative efforts of the Florida Bar and the Florida Association of Realtors. The primary purpose of the FAR-BAR is to provide an industry standard, reliable, and legally binding contract for Florida real estate transactions. Every year or so, the FAR-BAR is revised and updated to respond to the continuously changing laws, technology, and standard practices across Florida’s real estate industry. Whether you’re a professional in the real estate industry or an individual looking to buy or sell real property in Florida, it is necessary to understand the changes and how they impact contractual obligations after November 1, 2021.
Although The Metka Law Firm offers legal services to clients across the Sunshine State, most of our clientele is in Central Florida, where the AS-IS FAR-BAR form is more commonly used than the Standard Residential form. Although The Metka Law Firm offers legal services to clients across the Sunshine State, most of our clientele is in Central Florida, where the AS-IS FAR-BAR form is more commonly used than the (Standard) Residential form. Accordingly, the purpose of this article is to provide an overview of some of the major updates to the AS-IS FAR-BAR form.
Paragraph 1(d) PERSONAL PROPERTY: The definition of personal property is changing, it no longer includes “intercoms” but has been supplemented to include thermostat(s), doorbell(s), television wall mount(s) and television mounting hardware, mailbox keys, and storm protection items and hardware.
Paragraph 4. CLOSING DATE: Now requires that all funds required for closing be received by the closing agent and collected in accordance with Standard S.
Paragraph 5. EXTENSION OF CLOSING DATE: This change is to allow for compliance with CFPB requirements will be reduced from 10 days to 7 days and is only available if the loan has been approved through underwriting on or prior to the original agreed upon closing date.
Paragraph 6. OCCUPANCY AND POSSESSION: This paragraph will now include a requirement that Seller disclose seasonal and/or short-term vacation rentals.
Paragraph 7. ASSIGNABILITY: Default language has been added such that the contract will not be assignable if no box is checked.
Paragraph 8. FINANCING:
8(a) – Simplified to state that it is a cash transaction with no financing contingency.
8(b) & 8(b)(i) – Redefines the term “Loan Approval” by imposing a new obligation on the Buyer’s Lender to obtain a satisfactory appraisal or alternative valuation prior to expiration of the Loan Approval Period. Accordingly, beginning November 1, 2021, Loan Approval that is conditioned on receipt of satisfactory appraisal will not be contractually considered Loan Approval.
Loan Approval conditioned on the sale of Buyer’s existing property is now considered valid Loan Approval so long as Rider V is included in the Contract.
In addition to “diligent” efforts, Buyer must now also use “good faith” effort to obtain Loan Approval during the Loan Approval Period. The requirement to show “good faith” efforts has also been added to paragraph 8(b)(iv).
8(b)(ii) – If Seller wishes to be kept informed about the status of Buyer’s loan application, Seller must now request to be kept apprised via written request to Buyer.
8(b)(iii) – Buyer is no longer required to “promptly” notify Seller of loan approval status, but instead may notify Seller at any time during the Loan Approval Period.
Paragraph 9. CLOSING COSTS; TITLE INSURANCE; SURVEY; HOME WARRANTY; SPECIAL ASSESSMENTS:
9(a) – Seller’s closing costs now explicitly include “Charges for FIRPTA withholding and reporting”.
9(d) – Extends the timeframe for when the survey shall be delivered from the Title Evidence Deadline to “at least 5 days prior to Closing”.
Paragraph 18 STANDARDS
- TIME: This paragraph has been clarified to state that Calendar days are “based on where the Property is located”. Additionally, “day[s] on which a national legal public holiday is observed because it fell on a Saturday or Sunday” will now count as a legal holiday such that the deadline to be calculated will be extended to the next calendar day.
- FORCE MAJEURE: The definition of Force Majeure is now expanded to include “governmental actions and mandates, government shutdowns, epidemics or pandemics.”
- NOTICE: Email is now an acceptable form of formal “notice”.
COUNTER OFFER: Language has been simplified and option for Seller to reject has been removed in its entirety.
I hope this article was helpful in providing an understanding of some of the major changes coming to the AS-IS FAR-BAR on November 1st, 2021. There are many other changes that aren’t referenced in this article, so you are encouraged to do additional research and thoroughly review the new form(s) prior to using and/or recommending them to your clients.
For additional information please call our office at (407) 826 – 1952 to schedule a time to speak with our Board Certified Real Estate Attorney.
This article is written to provide general information prepared by a professional regarding the subject matter covered. It is not intended to be legal advice and should not be used in lieu of obtaining formal legal counsel. If you have questions regarding a contract you are considering signing or proposing to a client, please contact our office to schedule a complimentary telephone consultation with our Board Certified Real Estate Attorney.