SFAR’s Standard Forms Committee has made the first significant revision of the local Purchase Agreement in 10 years. Our thanks to the Task Force consisting of Co-Chairs Dan Hershkowitz and David Parry and Committee Members Patrick Connolly, Bill Jansen and Vickie Naidorf. Following the Task Force work, valuable input was received from members of the full Standard Forms Committee, the Managers Council, the Association’s Board of Directors and staff, and outside general counsel, Alex Weyand.
Click here to watch our pre-recorded live Webinar: "The New and Improved SFAR Purchase Agreement."
Click attachment below to download a copy of the class presentation slides.
Click attachment below to view a draft of the new Purchase Agreement.
SUMMARY OF CHANGES:
- Consistent with the CAR RPA, (1) the SFAR Purchase Agreement requires agreement on Liquidated Damages and Arbitration clauses to form a binding contract; (2) any performance date (e.g. a contingency removal deadline) which falls on a weekend or legal holiday is extended to the next business day; and (3) the appraisal and finance contingencies are distinct.
- All contractual contingencies apply unless and until waived or removed in writing - the Contingency Removal form should be attached to the offer.
- There is no longer a method of waiving contingencies within the contract. As an example, the Buyer’s investigation contingency can no longer be removed by initialing a paragraph inside the contract.
- The timeframes for each contingency, and related seller timeframes to provide necessary documentation, are set forth in “The Grid” in paragraph 8. The Grid cross references each contingency with the corresponding explanatory paragraph.
- The Purchase Agreement clarifies that Buyer’s failure to place the Initial Deposit in escrow following contract Acceptance is a material breach of the contract and the 3% Liquidated Damages clause limitation will not apply. The Buyer is advised to seek the advice and counsel of an attorney regarding his/her exposure to “actual damages.”
- The Fair Appraisal Act text is now incorporated inside the Purchase Agreement eliminating the need for a separate addendum.
- The right of the Buyer to assign the contract is clarified in paragraph 32. Procedures for assigning to Buyer’s own trust or LLC are explained.
- A new “definitions” paragraph 36 has been added for clarity.
- A “Designated Electronic Delivery Address” has been added for both agents – similar to the CAR procedures. Look for the “agent box” on the last page.