Here are some questions regarding contract law with answers provided by the legal department of Florida Realtors.
Q: An agent is representing a buyer who made an offer to purchase a residential property. The offer gave the seller three days to accept the offer. The buyer no longer wants to purchase this property and wants to withdraw the offer. The seller hasn’t accepted the offer, and there are two days left until the time-of-acceptance period expires. May the buyer withdraw this offer?
A: Yes. An offer may be withdrawn any time prior to acceptance, even if the time-of-acceptance period hasn’t expired. The withdrawal may be done by verbal or written communication; however, a written withdrawal is recommended.
Q: A real estate contract can be a complicated document containing multiple time periods (i.e., loan approval/commitment periods, inspection period, title review period, etc.). If a customer asks to modify a time period, the Realtor may be creating some form of legal ambiguity in the contract. Does Florida Realtors have any form that might aid in making these modifications to time periods?
A: The Extension Addendum to Sale and Purchase Contract, or ea-1, available on Florida Realtors Form Simplicity, gives members a quick, easy way to modify common contractually defined time periods. The Realtors needs to simply check the box (or boxes) for the time period(s) they wish to modify and have the addendum executed by the parties. A concern about creating legal ambiguities is always a challenge associated with a contract modification. As always, if a Realtor is concerned about the proper way to modify a contract, refer your customer to a legal professional for assistance.
Q: An agent represents a short sale seller who executed the Florida Realtors/Florida Bar ASIS-1 with a buyer along with the accompanying Short Sale Addendum (CR-1 G). The seller’s lienholder stated that it will approve the buyer’s contract, but that it is requiring the parties to close by a certain date. Should the parties include this new closing date in an addendum to the contract?
A: Yes. If the seller’s lienholder and the seller need to close by a certain date, the two parties must mutually agree to this change for it to be incorporated into the contract. One party may not unilaterally change the contract terms.
Q: A buyer made an offer, and the seller made a counteroffer. The buyer countered the seller’s counteroffer, and the seller rejected it. Now, the buyer wants to go ahead and accept the seller’s original counteroffer. May he?
A: No. The buyer’s counteroffer served as a rejection of the seller’s counteroffer. Since the seller’s counteroffer was rejected it may no longer be accepted.
Q: An agent has a listing for a residential bank-owned property. The property is in a community with a mandatory homeowners’ association. Is the disclosure summary for the community required to be part of the sale and purchase contract if the property is bank owned?
A: Yes. Section 720.401(1)(a), Florida Statutes, provides that when a residential property is located in a community with a mandatory HOA, the sale and purchase contract shall refer to and incorporate the disclosure summary. There’s no exception for bank-owned properties. In addition, Section 720.401(1)(c), Florida Statutes, provides that if the disclosure summary is not provided to a buyer before he or she executes the sale and purchase contract, the buyer may void the contract. This must be done by delivering written notice to the seller or the seller’s agent within three days after receipt of the disclosure or prior to closing, whichever occurs first. Both the Florida Realtors® addendum for Homeowners’ Association (form FARA-10 B) and the Comprehensive Rider to the Residential Contract for Sale and Purchase, Homeowners’ Association/Community Disclosure (form CR-1 B) contain the required disclosure summary.
Q: A buyer makes an offer on a property, but the seller has not accepted the buyer’s offer. May the buyer withdraw his offer?
A: Yes. The buyer may withdraw; however, his withdrawal must be done prior to the seller’s acceptance.
Q: A agent is representing a customer with an executed contract. The contract has inconsistencies between the preprinted provisions and the handwritten addendum. The handwritten addendum is in direct conflict with some of the preprinted terms on the contract. Which terms will govern?
A: Handwritten and typed terms will generally prevail over preprinted terms that are in direct conflict.
Q: Is a seller required to accept a full-price offer?
A: No. The asking price is considered an invitation to make an offer rather than an offer that must be accepted.
Q: A seller has received offers from several buyers and now wants to counter all of them in writing. Is this allowed?
A: While a seller is permitted to counter, in writing, more than one offer at the same time, doing so is not advisable. If the seller counters in writing more than one offer and each counter is accepted before the seller is able to communicate an intent to withdraw her counter to one of the buyers, the seller could be bound to multiple written contracts and thus have potential liability to those buyers.
Q: How does a buyer assign his or her rights in a sales contract to another party?
A: Buyer 1 (assignor) and Buyer 2 (assignee) should enter into a written Assignment of Agreement, which should be drafted by one of their attorneys.
Q: A buyer submits an offer on a house, and the seller accepted it. The buyer then changed his mind, and says that because the house is in a mandatory homeowners’ association that there is a three-day rescission period in which he can cancel without incurring liability. The seller provided the buyer with the “Disclosure Summary” pursuant to Section 720.401, Florida Statutes and the contract also complies with Section 720.401 requirements. Does the buyer have a three-day right to cancel?
A: No. Unless the contract includes a provision giving the buyer three days to cancel, the buyer would not have such a right.
Q: A single agent for a buyer submits an offer using the FAR Residential Sale and Purchase contract. The seller’s single agent says that his brokerage prefers the Florida Realtors/Florida Bar Contract for Sale and Purchase and that they won’t present the offer to his seller. May they do that?
A: It depends. Section 475.278(3)(a), Florida Statutes, provides that a single agent must present “all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.” Therefore, if the seller has previously directed his or her single agent in writing that he or she shouldn’t be presented with any offers written on the FAR contract, then it would not be a violation for the seller’s single agent to refuse to present it to the seller. If the seller hasn’t so previously directed his or her single agent in writing, then the agent must timely present the offer.
Q: Is a seller required by law to accept a full-price offer?
A: No. There is no Florida law that would require the seller to accept any offer.