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Sunday, July 19, 2020

2020: Changes to the CBA/CR Residential Purchase Contract

By William D. Fergus, Jr., Esq., OSBA Certified Specialist, Residential Real Property Law

A new version of the Residential Real Estate Purchase Contract was released by the Columbus Realtors® and the Columbus Bar Association on July 1, 2020. The new release features contract changes that are the culmination of two years of work by your Standard Forms Committee and the Columbus Bar Association’s Real Property Committee. A copy of the new contract form with my explanatory annotations is available here. The annotated contract provides explanations and useful information for many of the most important contract provisions.

CONDOMINIUM OR HOMEOWNERS’ ASSOCIATION DOCUMENT PROVISION (PARAGRAPH 6.5)
This is a new paragraph and a very significant addition to the contract. It requires sellers of condominium units or homes situated in subdivisions governed by a homeowners’ association to provide buyers with documents and information that buyers need to evaluate the legal and financial health of the condominium or homeowners’ association, as well as the suitability of the premises for the buyer’s intended use. Paragraph 6.5(a) lists the documents and information that must be provided within 5 calendar days of the date of contract acceptance. Paragraph 6.5(b) gives buyers the right to terminate the contract within the time constraints set forth therein based either the seller’s failure to provide the listed documents/information, or the buyer’s disapproval of provided documents.

APPORTIONMENT OF CERTAIN PROPERTY TRANSFER COSTS (PARAGRAPH 10.4)
The language in current paragraph 10.4 has created some confusion as to whether the buyer or seller should bear the cost of certain fees relating to the sale or transfer of real estate imposed by condominium and homeowners’ associations. Under new paragraph 10.4, the seller pays costs associated with seller’s goal of selling the condo/HOA property, including procurement of documents that only Seller may procure as present owner of the property, and payment of attendant fees. The buyer then pays costs associated with buyer’s goal of financing the purchase and of transferring membership to buyer’s name, and generally acquiring the property.

MISCELLANEOUS CHANGES (PARAGRAPHS 3.2(D), 6.1, 7, 13.5 AND 13.6)
There are a number of other changes to the contract. Paragraph 3.2(d), Appraisal Contingency, is amended to take into account lender opinions of value that are not based on appraisals. Paragraph 6.1, Inspections and Tests, now includes a recommendation that inspections and tests be performed by inspectors licensed by the State of Ohio. Paragraph 7.2, Gas Line Warranty or Protection Plan, is deleted because most home warranty plans now include gas line warranty protection. Finally, Paragraphs 13.5 and 13.6 are amended to exclude text messages as contract documents, and provide for the delivery of contract documents by text message.

GET EDUCATED!
There will be more information regarding new paragraph 6.5 in a future edition of In Contract. In the meantime, Realtors are advised to take online continuing education classes dealing with either paragraph 6.5 in particular, or the entire contract, that will be offered by your Columbus Realtors® or other providers.

 

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