The latest Legal Q+A to keep you in the know!
Check out our webinar with NC REALTORS® General Counsel Will Martin
"Legal Hot Topics and COVID-19 Forms"
QUESTION: If a buyer indicates he won’t close, when can a seller terminate the contract?
I represent a seller and the listed property is under contract. The due diligence period has expired, and the settlement date is 30 days away. Yesterday, the buyer’s agent sent me an email stating that his client will not proceed with the purchase. However, the buyer is now refusing to sign a mutual termination agreement unless the seller releases the entire earnest money deposit back to the buyer. The buyer is not claiming any legal right to terminate the contract unilaterally. Apparently, he is hoping that the seller will give up his contractual right to the deposit and terminate now so that he doesn’t have to wait 30-45 days to put his property back on the market. Does my seller have to wait until the Settlement Date, or maybe even 14 days after the Settlement Date, to terminate the contract and re-market the property? Or can he terminate now based on what the buyer agent has told me?
QUESTION: One of my listings went under contract early this year. The parties signed the COVID-19 Addendum (Form 790) a couple weeks ago, because the city imposed a stay at home order and the buyer and seller were not sure if more time would be needed to complete the transaction. So far, the transaction has proceeded without needing more time.
The buyer and seller have a mutual acquaintance, and today this acquaintance informed the seller that the buyer might lose their job. Now the seller is worried that if the buyer extends the deadlines under Form 790 to accommodate due diligence inspections, the buyer could lose their job in that additional time and end up terminating the contract. Obviously, this would significantly delay the seller’s ability to resell to another buyer. Can the seller just terminate the contract?
QUESTION: My real estate firm is located in an area where a local "stay at home" order restricts showings of listed properties. I have seen several attorney-drafted forms that make it possible for a buyer and seller to put a property under contract "sight unseen" and that give the buyer a short period of time to then conduct an onsite visual inspection of the property before deciding whether to continue with the transaction. That would be a helpful form for my agents to be able to offer to their clients, and I was wondering if the NC REALTORS® is giving consideration to creating a form like that?
QUESTION: I’ve recently had a couple of instances where my listing has gone under contract, there has been a delay in the delivery of the Due Diligence Fee (“DDF”), and the buyer backs out and refuses to pay the DDF. Can I hold on to the signed contract until the DDF is paid to prevent this situation from happening?
QUESTION: I am a listing agent. One of my listings went under contract. After arranging for a home inspection, the buyers submitted a repair request. The parties went back and forth trying to reach an agreement regarding repairs. When an agreement could not be reached, and before the due diligence period expired, the buyers submitted a notice that they were terminating the contract. Following delivery of that notice, the parties continued talking and were able to reach an agreement regarding repairs. The parties now want to move forward with the transaction. Can they reinstate the terminated contract?
QUESTION: A buyer’s agent contacted me today and requested that my seller arrange for the termite inspection to be performed. The buyer is obtaining a VA loan, and the Department of Veteran’s Affairs (“DVA”) has required that a termite inspection be performed at the seller’s expense. Does Form 2A4-T (“FHA/VA Financing Addendum”) require the seller to schedule this inspection and ensure that it is done?
QUESTION: Can I use the REALTOR® logo in my marketing? I would like to create an image for use in my marketing that would include a likeness of myself along with the REALTOR® logo. Would that be okay?
QUESTION: If a contract written using the Offer to Purchase and Contract (Form 2-T) goes more than 14 days past the Settlement Date, but the buyer and seller are both moving forward to closing in good faith, can the initial contract be extended or does a new contract need to be executed?