When I first started in the real estate business, the standard agreement of sale was 1 1/2 pages long. There was only one addendum and that was only used for FHA transactions. That was it! Oh how things have changed.
Today’s PAR (Pennsylvania Association of REALTORS) forms library contains over one hundred forms and they are constantly being updated or revised by PAR’s Standard Forms Committee.
The latest round of changes went into effect on January 1, 2020. If you didn’t know that changes were made or you haven’t taken the time to understand how the changes may affect your clients, it would behoove you to spend some time and get up to speed.
Let’s first take a look at the list of forms that have changed:
- Standard Agreement of Sale of Real Estate (PAR Form ASR)
- Buyer (Tenant) Agency Contract (PAR Form BAC)
- Broker’s Fee Agreement (PAR Form BFA)
- Manufactured Home Community Rights Act Notice (PAR Form MN)
- Non-Exclusive Buyer (Tenant) Agency (PAR Form NBA)
- Residential Property Management Agreement (PAR Form PMA)
- Listing for Rent Contract – Exclusive Right to Rent Real Property (PAR Form XLR)
- Listing Contract (Seller Agency Contract) – Exclusive Right to Sell Real Estate (PAR Form XLS)
- Listing Contract – Exclusive Right to Sell and/or Lease Commercial Property (PAR Form XLSC)
Before you bemoan the fact that this list is close to ten forms long, the changes can be summarized into three main areas of concern.
1. Sales Agreements will call more attention to items that may or may not be included with the sale of a property. Specifically, hard-wired security systems, thermostats, solar panels, and windmills.
While the agreement now lists these items as ‘included’ in the sale, PAR also added a new clause that reminds buyers, sellers, and their agents to carefully look around the property and address items that may be fixtures or personal property and could become a point of contention as settlement approaches.
While we’re spending some time on the ‘Fixtures and Personal Property’ paragraph in the agreement of sale, it would probably be a good idea that you reacquaint yourself with what ‘IS’ included.
There is also a new paragraph in the agreement of sale devoted to a relatively new phrase called the ‘Internet of Things (IoT).’
The paragraph states that if the seller has personal devices (i.e. cell phones, personal computers , tablets) that are connected to IoT devices that are included in the sale of the property, they will disconnect and clear all relevant data prior to settlement. It also warns seller not to try to access IoT devices left on the property after settlement.
Sellers also agree to restore IoT devices to their original settings, change passwords or codes, update network settings, and submit change of ownership and contact info to device manufacturers and service providers.
2. Buyer and Tenant Contracts now contain a new warning to clients about recordings on a property.
The contract warns them not to record oral communications without having the consent of all parties. In addition, a clause was inserted that reminds the buyer that the property may be under surveillance and that private conversations should be held elsewhere.
3. Seller and Landlord Contracts now also contain a notice about recordings by both parties.
The seller is encouraged to secure all personal and confidential items because the buyer or tenant may want to record their experience. In addition, there is a notice that recording conversations of others could be a violation of wiretapping laws and the seller or landlord should seek legal counsel if they choose not to deactivate their monitoring device(s).
In today’s world, agents will encounter more and more ‘Smart Homes’ with IoT devices. You owe it to your client, be it the buyer or the seller, to make them aware of their obligations and responsibilities under the newly-worded PAR contracts.
If you have questions or concerns, I would encourage you to discuss them with your Broker or legal counsel.