Changes to the Florida Contract

 TRANSCRIPT Beth Helvey:
Hi everybody, Beth Helvey with Couture Real Estate. It is September 8th, 2021 and I hope you're doing well today. I want to go over some changes with you that are affecting the Florida real estate contract. And this will affect both the FAR/BAR, or what some people refer to as the standard contract, and the as is. There's a lot of changes, but I'm just going to hit the highlights with you.

Beth Helvey:
One of them is the personal property section. The personal property section on the contract is the part that declares what items that are personal property must remain with the house. For example, the refrigerator, the dishwasher, the oven, the curtains, the curtain rods, things that are attached must remain with the property. Things that have been added such as thermostats, because people are now installing smart thermostats, doorbells, people are now installing smart doorbells, storm shutters, believe it or not, those have not been on the contract before. Mailbox keys, which had been an issue before, also our TV wall mounts. TV wall mounts have been a question for years. So the actual mount that the TV goes on stays with the house.

Beth Helvey:
And if there is something that you want to take with you as a seller, there is a section right under that, where you can specifically state, "This does not stay." For example, I'll see curtains on there. I'll see a certain light fixtures, grandma's chandelier is hanging in the foyer, things like that. And you'll see that on that particular section and it is contractually agreed to that the seller will take it with them when they exit the property.

Beth Helvey:
A couple other things are water lifts. If you're buying a property with a dock, it is now within the contract that the seller needs to repair items that are affecting the lift and the dock equipment. This all, of course, depends on how your contract is set up. But if it is in your contract that your seller is going to agree to a certain amount in repairs, this is now included in that repair section. Prior to this, sellers did not have to repair anything to do with a dock or a dock lift, but now they do. Which also means buyers, you're going to get that inspected, and some general inspectors do them, some do not.

Beth Helvey:
The other thing is force majeur. This is an interesting one. Prior to this, force majeur means anything which colloquial means an act of God that affects a closing. For example, in Florida, hurricanes will, which means that if you are due to close on a certain day and a hurricane comes through and either shuts down the closing because there's no power, the offices are closed or anything like that, we now have a 14 day timeframe built into the contract to which we can extend closing to allow everything to get back up and running.

Beth Helvey:
The good thing about this is there's no addendum that is needed, everybody knows that that 14 days is built in and we can just move everything along so that it can happen. This was important, not just for Florida, but when the Northeast was having snow storms. I think it was four or five years ago. We enacted force majeure because the Northeast was basically snowed in. So the people that had to leave to close on a property couldn't, nor could FedEx get in and out. So if FedEx can't get in and out to send paperwork back and forth, you need to use force majeure.

Beth Helvey:
They've added a couple of things, and this has to do with 2020 and the pandemic. They've added government actions and mandates. They've added shut downs, pandemics and epidemics. During all of 2020, the question was asked, "Because my city is shut down or my county is shut down, does that mean that I have to close?" In 2020, it did. But in 2021 going forward, if that occurs again, then no, you do not have to close, the forced majeure kicks in.

Beth Helvey:
The big change is going to be appraisals and low commitments. The way the contract currently states is your loan commitment is to be done within 30 days. And that's the default on the contract, that timeframe is of course negotiable. Prior to the November 1st change, the appraisal does not have to occur within the 30 day timeframe. The appraisal and how that affects the contract and closing lives outside of the loan commitments. What that means is this, is if you have a 60 day closing and you get your loan commitment by day 30, then you have your appraisal on day 40 or day 45 and the property does not appraise and the buyer and seller can not negotiate this out to an agreement ad the contract falls apart. Because the appraisal lives outside of the commitment timeframe, the buyer can leave the contract and keep their escrow. And this is a condition independent of the loan commitment and can occur all the way up to the day of closing.

Beth Helvey:
The way the contract will be written starting on November 1st is that appraisal must be done within the 30 day timeframe if you want the appraisal condition to be part of your loan commitment. I know that times are different now, but the way this is going to work is that the appraisal must occur and must be returned within that 30 day timeframe in order for the buyer to be able to exit the contract, should the property not appraise.

Beth Helvey:
Now, the way this will affect some people is this, buyers will need to get their paperwork into their lender in a timely fashion. If your lender asks for a certain item of paperwork or a certain document, you need to get it in right away because appraisals aren't ordered right away. Appraisal is a step in the process and there are certain things that must occur before the appraisal can be ordered. So it's not like you go to contract on Tuesday and your appraisal is ordered on Wednesday. That's not how lending works. Buyers need to make sure that they get all of their documentation into the lender within a quick and timely amount of time so that they can get that appraisal housed within the 30 day loan commitment timeframe.

I hope this was understandable. I hope this was clear to you. If you have any questions, please put it in the comments, send me a DM, text me, call me and let me know and I'm happy to go over all this with you. These changes, plus some others, will go into effect on November 1st of 2021, which is in just over a month and a half. So be aware of this, especially those of you who are getting loans. This will affect you most of all. So I hope you're having a wonderful day. It is beautiful outside today. If you have the opportunity to get outside and get some vitamin D, I encourage you to do so. Wear your sunscreen, drink a lot of water, and I will talk to you soon. Bye everybody.