BRIEF BYTES: Question and Answer Forum

   The purpose is to answer frequently asked or unusual questions. Topics will range from real estate, business, litigation and trusts and estates. Your feedback is appreciated. Direct your comments to Cherisse Roy at croy@scott-harris.com

CHANGES TO THE FAR/BAR CONTRACT

  The latest revision to the FAR/BAR contract is now available, so I would like to outline the major changes.

  The title evidence sections (Paragraph V and Standard A) have been changed to specify that the title evidence will be delivered a specific number of days prior to closing and to delete the provision that title evidence, in no event, would be required sooner than five days after the issuance of a mortgagee commitment. Standard A has been revised to allow the buyer to extend the closing up to five days if the title evidence is delivered less than five days prior to the closing. Therefore, it is important that when a time period for delivery of title evidence is set forth in the contract, that time period be more than five days prior to the closing date.

  The purchase price section of the contract now specifies that the proceeds paid at closing can be in the form of a locally drawn "official bank check." This change has been made due to the fact that cashier's checks are not frequently issued.

  Paragraph VII have been amended to add that in addition to the restrictions, easements, and limitations to which the buyer is required to take title under the terms thereof, the buyer will take subject to "outstanding oil, gas and mineral rights of record without right of entry." This addition establishes that if the property is subject to such outstanding oil, gas and mineral rights, but the right of entry to explore for oil, gas and minerals has either been released or was never established, the existence of these rights do not constitute a title defect.

  Standard N has been substantially revised to provide that inspections must be made and written reports stating the items that do not meet the warranty of Standard N must be prepared within twenty days of the contract date. Further, this provision now defines "working condition" to mean the manner in which the item was designed to operate and cosmetic conditions are specifically excluded from the warranty. Standard D now specifically excludes fences from those items which must be free from wood destroying organisms.

  The contract now provides a box to indicate that if the comprehensive rider is attached. The FAR/BAR comprehensive rider contains several commonly used provisions and contingencies such as an attorney approval clause for buyers and sellers, and a clause that specifies whether a backup contract will be accepted.

  I urge all members to obtain a copy of the revised FAR/BAR contract and review these changes and to become thoroughly familiar with this contract form.

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