Friday, November 9, 2007
Kill all the lawyers
Yesterday afternoon I attended a class that discussed the 9/07 Revisions to the FAR/BAR (Florida Association of Realtors and the Florida Bar) forms used by Realtors (and attorneys) to memorialize agreements to buy and sell real estate. Local real estate attorney Wayne Larue Smith taught the class.
Wayne aptly pointed out that virtually every contract for sale and purchase of real estate in Key West is made via an "AS IS" contract for the simple reason that our real estate is unique. Our homes are not of the cookie-cutter variety up north where you will see block after block of the same style house. Many of the homes in Old Town have "special" easement or restriction issues. Thus a Buyer of real property in Key West typically takes the property on an "AS IS" basis and has the right to inspect the property to determine if it is suitable to his needs. This would include determining if there are any structural, mechanical, environmental, or legal impediments, or any governmental, building, , safety codes, restrictions or requirements that may effect the real property. If after completing his inspection process a Buyer "accepts" the real property, he gets the benefit of his bargain. If he finds fault with an issue, he can try to re-negotiate the contract to achieve a better resolution of the issue. If he can't renegotiate, he can walk and get his earnest money deposit refunded.
Here's the rub: the new revision contains language that says after an inspection "Unless Buyer exercises the right to cancel granted herein, Buyer accepts the Property in its present physical condition, subject to any violation of governmental, building, environmental, and safety codes,restrictions or requirements and shall be responsible for any and all repairs and improvements required by Buyer's lender." So if a buyer misses something or relies on a false statement by a seller or an erroneous statement by a Realtor, the Buyer is stuck.
Another provision in the SELLER'S DISCLOSURE paragraph adds this language: "Seller has no knowledge of any repairs or improvements made to the Property without compliance with governmental regulation which have not been disclosed to Buyer." Many sales are not accompanied by Seller's Disclosure statements. I think this language may cause many a deal to go south.
One Realtor pointed out that much of the discussion suggested that the process of buying and selling seemed to be adversarial. He said it does not have to be that way. I agree. The fewer number of issues between buyers and sellers the better. Reduce the opportunity to disagree.
It will be interesting to see if any of the September 2007 Revisions lead to more (or less) litigation between disgruntled Buyers, Sellers, and/or Realtors.
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Gary Thomas in a Nutshell
- Gary Thomas
- Key West, Florida, United States
- I first read about Key West in a magazine called "After Dark" sometime in the mid 1970's. But it wasn't until March 1984 that I made my first visit to the island that would become my home. I had two weeks for a vacation and reserved a room at Colours Guesthouse (now Marrero's Guest House) for one week. I thought that if I didn't like Key West, I could always go back to Miami or Ft. Lauderdale for the rest of my trip. But after a couple of days in Key West, that was no longer a consideration. But when I wanted to extend my stay for the extra week I found there was no room at the inn. The guesthouse owner did find me a room at LaTeDa, the infamous guesthouse/restaurant. That's a story I'll write another day. But those two weeks in Key West gave me the realization that I had found Paradise. Key West has been my home since 1993 and my only regret is that it took me so long to get here. I am a full time Realtor at Preferred Properties CRI. Let me help you find your new home or business in Paradise. Living in Paradise is not a slogan, it's a way of life.