SUMMER 2015 - Manhattanville College

LOUISIANA REALTORS®
COMMENTARY TO
LOUISIANA RESIDENTIAL
AGREEMENT TO
BUY OR SELL
BY
Patricia B. McMurray
ADAMS AND REESE LLP
Baton Rouge, Louisiana
BATON ROUGE , LOUISIANA (225) 336-5200 ● NEW ORLEANS, LOUISIANA (504) 581-3234
JACKSON, MISSISSIPPI (601) 353-3234 ● HOUSTON, TEXAS (713) 652-5151 ● MOBILE, ALABAMA (215) 433-3234
NASHVILLE, TENNESSEE (615) 341-0068 ● MEMPHIS, TENNESSEE (901) 525-3234
BIRMINGHAM, ALABAMA (205) 250-5000 ● WASHINGTON, D C (202) 737-3234
Copyright © 2007 LOUISIANA REALTORS®. All Rights Reserved. Any reproduction,
adaptation, or redistribution of this work in any form is prohibited, except upon the
express written permission of LOUISIANA REALTORS®. Notwithstanding the foregoing, the
Louisiana Purchase Agreement Form, as amended, promulgated by Act 333 of the 2006
Louisiana Legislative Session is dedicated to the public domain.
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PatriciaB.McMurray
Practice Teams
Partner, Transactions and Corporate Advisory
Services Real Estate Practice Team Leader
Baton Rouge
(225) 336-5200
[email protected]
Real Estate
Commercial Restructuring
Bankruptcy
Banking and Finance
Forestry Law
Construction and Real Estate
Economic Development
Areas of Experience
Real Estate Forestry
Commercial Litigation Bankruptcy
State Bar Admissions Louisiana
Education
J.D., Louisiana State University Paul M. Hebert Law Center, 1986
B.S., University of Alabama, 198 3
Honors and Awards: BRBA Friend of Pro Bono Award, 1998
LBA Pro Bono Publico Award, 199 4
LSU Law School: President's List and Moot Court Board
University of Alabama, Phi Beta Kappa
Publications:
Contributor, The Louisiana Section of the Bankruptcy Exemption Manual, West's Bankruptcy Series
Patricia B. McMurray's practice focuses on all types of commercial transactions, forestry and real
estate. She is also an experienced litigator in the bankruptcy and general commercial areas.
Ms. McMurray is an active member of the Baton Rouge Bar Association, and in 1993, she was awarded
the "Baton Rouge Association President's Award." In 1994, she received the "Pro Bono Publico Award"
from the Louisiana State Bar Association, and in 1998, she received the "Friend of Pro Bono Award" from
the Baton Rouge Bar Association. In 2003, Ms. McMurray was selected as one of the nine most
influential women in the Baton Rouge business community. Ms. McMurray also serves as a speaker for
the Louisiana State University Law School, the National Business Institute and the Louisiana State Bar
Association. She is a member of the Board of Directors of Boys Hope/Girls Hope of Baton Rouge, and the
Childrens Charter School. She is also a former board member and president of the Baton Rouge Big
Buddy Program.
Ms. McMurray is listed in Louisiana Super Lawyers (Real Estate).
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DISCLAIMER
These materials are to be used for informational purposes and should not be
construed as specific legal advice, nor are they designed to cover every aspect of a
legal situation or every factual circumstance that may arise regarding the subject
matter included.
This publication is for reference purposes only and association members or other
readers are responsible for contacting their own attorneys or other professional
advisors for legal or contract advice.
The comments provided herein solely
represent the opinions of the authors and is not a guarantee of interpretation of the
law or contracts by any court or by the Louisiana Real Estate Commission.
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I.
STATEWIDE PURCHASE AGREEMENT FORM
A.
INTRODUCTION
The Law requiring the Statewide Purchase Agreement Form
In 2006, the Legislature passed Act 333 which provides that real estate licensees in
the State of Louisiana shall use the Statewide Purchase Agreement Form (the
“Statewide Purchase Agreement Form”) prescribed by the Louisiana Real Estate
Commission (“LREC”) in making their offer to purchase or sell residential real
property. The statute provides:
A. A licensee representing either the buyer or seller of
residential real property shall complete the Purchase Agreement Form
prescribed by the Louisiana Real Estate Commission in making an offer
to purchase or sell residential real property. No person shall alter the
Purchase Agreement Form; however, addendums or amendments to
the Purchase Agreement Form may be utilized.
B. The promulgation of this form shall be conducted in
accordance with the Administrative Procedure Act no later than July 1,
2007.
C.
(1)
As used in this Section, the term "Purchase
Agreement Form" shall mean a document in a form prescribed
by the Louisiana Real Estate Commission as a written
agreement for the sale or purchase of residential real property.
(2) As used in this Section, the term "residential real
property" means real property consisting of one or not more
than four residential dwelling units, which are buildings or
structures each of which are occupied or intended for occupancy
as single family residences.
The purpose of the law was to assist real estate licensees, many of whom now have
clientele statewide, with a uniform starting contract to begin their negotiations.
The Statewide Purchase Agreement Form is not intended to mandate the terms of
sale but to assist licensees with a central beginning contract.
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B.
EXPLANATION TO STATEWIDE PURCHASE AGREEMENT
FORM
The Statewide Purchase Agreement Form promulgated by the Louisiana Real Estate
Commission is titled the “Louisiana Residential Agreement to Buy or Sell”. This
form is reproduced in sections and shown in blue text. The comments shown in red
are explanations of the information to be filled in for each blank. Further comments
to the Statewide Purchase Agreement Form are shown in black.
1.
Box at Top of First Page of Statewide Purchase Agreement
Form
____(Listing Firm)________________
______(Selling Firm)_______________
Listing Firm
Selling Firm
__(Name of Seller’s Designated Agent)
Seller’s Designated Agent
□
Office
Buyer’s Designated Agent
(Information on Buyer’s Designated Agent)
(Information on Seller’s Designated Agent)
Phone Number
_(Name of Buyer’s Designated Agent)_
Dual Agent
Fax
Phone Number
Office
Fax
(E-mail of Buyer’s Designated Agent)
_(E-mail of Seller’s Designated Agent)
Email Address
Email Address
_(Person or company to whom offer delivered)____
Delivered by Designated Agent to
(Date and time of delivery)____ _____
Day
Date
Time
AM/PM
______________________________________________________________________________
Comments
_(Name of person receiving offer)_________________(Date and time of receipt)
Received by
Day
Date
Time
AM/PM
(Name of Designated Agent receiving offer)_________(Date and time of receipt)
Received by Designated Listing Agent
Day
Date
Time
AM/PM
Comments:
The information box at the top of the Statewide Purchase Agreement Form provides
blanks for information on the listing firm and selling firm. This information is
intended to assist the agents in transmitting the offer and tracking delivery of the
offer. If the designated agent for the Buyer and Seller is the same person, the dual
agency box contained in the middle of this informational box should be selected.
2.
3
Date
Date: _____(Date of Offer)____
Comments:
Line 3 – This blank is for the date is the date the offer is made by the Buyer or
Seller.
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3.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Property Description
PROPERTY DESCRIPTION: We offer and agree to Buy/Sell the property at:
(Municipal Address) __(Municipal address of property to be sold, example 142 Green Street)
City (City name of property to be sold)___; Zip _(Zip) ___; Parish__(Parish)_____________; Louisiana,
(Legal Description __(Legal description of property to be sold)________________________________
_________________________________________________________________________________
on lands and grounds measuring approximately __(Lot or land size of property to be sold if available)_
or as per record title; including all buildings, structures, component parts, and all installed, built-in,
permanently attached improvements, together with all fences, security systems, all installed speakers
or sound systems, all landscaping, all outside TV antennas, all satellite dishes, all installed and/or
built-in appliances, all ceiling fans, all air conditioning or heating systems including window units, all
bathroom mirrors, all window coverings, blinds and associated hardware, all shutters, all flooring, all
carpeting, all cabinet tops, all cabinet knobs or handles, all doors, all door knobs or handles, all
windows, all roofing, all electrical systems, and all installed lighting fixtures, chandeliers and
associated hardware, other constructions permanently attached to the ground. If owned by the
SELLER prior to date of this Agreement, standing timber, unharvested crops and ungathered fruits of
trees on the property shall be conveyed to the BUYER. The following movable items here remain with
the property, but are not to be considered as part of the Sales Price and have no value:
__(Description
of
items
remaining
with
the
property
but
not
included
in
the
sales
price)_____________________________________________________________________________
_________________________________________________________________________________.
All items listed herein are included in the property sold no matter how they are attached or installed,
provided that any or all of these items are in place at the time of signing of this Agreement to Buy or
Sell (the “Agreement”), unless otherwise stated herein. (All of the above contained in lines 5 through
24 are collectively referred to herein as the “Property.”) The following items are excluded from the
Property sold: __(Description of items being removed from the Property)_______________________
_________________________________________________________________________________
_________________________________________________________________________________.
Comments:
Line 5 – This line is the offer by the Buyer or Seller to buy or sell the Property
described on the following lines of the Statewide Purchase Agreement Form.
Line 6 – This blank should be completed with the municipal or street address of the
Property to be sold if available. For example, the municipal address of the Property
to be sold might be 142 Green Street.
Line 7 – These blanks are for the city, the zip code and parish of the Property to be
sold if available.
Line 8 – This blank is provided to include the legal description of the Property to be
sold if available. The legal description can also be attached as an addendum to the
Statewide Purchase Agreement Form.
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Line 10 – The approximate measurement of the land and grounds of the Property to
be sold should be included on this blank if available. If this information is not
available terms such “as per survey” or “not available” may be included.
Lines 11 – 18 – These lines describe the additional property being sold with the
land. The necessity to further list the specifics of property being sold originally
derived from the Willis-Knighton Medical Center vs. Caddo-Shreveport Sales & Use
Tax Commission, 2005 WL 737 481 (La. 2005) decision whereby the Louisiana
Supreme Court called into question what had long been considered in the industry
to comprise the component parts of real property. This listing of specific items also
provides an opportunity to discuss with Buyers and Sellers exactly what items will
remain with the Property being sold and which items will be taken by the Sellers
upon their departure from the Property. The items listed on Lines 11 through 18
are intended to be component parts of the Property being sold.
Lines 18 – 20 – This sentence provides the Property being sold will include standing
timber (timber that has not already been cut), unharvested crops and ungathered
fruits of the trees on the Property unless this term is changed on an addendum to
the Statewide Purchase Agreement Form or unless these crops or timber has
previously been sold by the Seller.
Lines 20 - 24 – This blank provides a place to list movable items which will remain
with the Property but are not considered part of the Sales Price and therefore have
no value per the sale. Movable items that might be left with the Property at no
value regarding the Sales Price for example, include an item such as a refrigerator.
Lines 25 - 28 – This definition provides that the Property being sold shall include all
of the above referenced Property per Lines 5 through 24 collectively referred to as
the “Property” elsewhere in the Statewide Purchase Agreement Form.
Lines 28 - 31 – This blank is to include items excluded from the Property to be sold
such that if a Seller is not selling window coverings for example, the Seller could
say in this portion of the Statewide Purchase Agreement Form, “window coverings
are excluded from the Property sold”.
4.
33
34
35
Mineral Rights
MINERAL RIGHTS:
□
□ If SELLER owns any mineral rights, they are to be conveyed without warranty.
_*____% mineral rights owned by SELLER are to be reserved by SELLER, but SELLER shall waive
any right to use the surface for any such reserved mineral activity or use.
* - Percentage of mineral rights which Seller is retaining.
Comments:
Line 33 The first checkbox should be selected if the Seller may own any mineral
rights and the Seller is conveying these rights to the Buyer without warranty of title
to the minerals. This means the Seller is transferring the mineral rights he may
have but is not warranting or guaranteeing to the Buyer that there are any mineral
rights which he may be able to convey to the Buyer.
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Line 34 - The second checkbox should be selected if the mineral rights owned by
the Seller are to be reserved by the Seller, or if the Seller is conveying a portion of
mineral rights to the Buyer. For example, the Seller may wish to retain 50% of the
mineral rights and convey 50% of the mineral rights to the Buyer. The Seller might
also fill in 100% in Line 34 if the Seller is reserving all mineral rights.
Lines 34 - 35 – This line provides, the Seller shall waive any right to use the surface
of the Property being sold for any reserved mineral activity or use. This means the
Seller is agreeing that any drilling or production of minerals shall not be on the
surface of the Property being sold. For example, the mineral production could be
by directional drilling off the Property.
5.
37
38
39
40
PRICE
PRICE: The Property will be sold and purchased subject to title and zoning restrictions, servitudes of
record, and law or ordinances affecting the Property for the sum of ____________________________
__(Written out amount of Sales Price, example One Hundred Thousand)___________Dollars
($100,000
) (the “Sales Price”).
Comments:
Lines 37 - 40 – This paragraph provides a blank to fill in the offered Sales Price for
the Property both alphabetically and numerically. The paragraph further provides
the Property will be sold subject to title and zoning restrictions, servitudes of
record, and law or ordinances affecting the Property. This amount in the blank on
Lines 38 – 40 is called the “Sales Price” through the remainder of the Statewide
Purchase Agreement Form.
6.
42
43
44
45
Contingency for Sale of Buyer’s Other Property
CONTINGENCY FOR SALE OF BUYER’S OTHER PROPERTY:
□
This sale is contingent on the sale
of other property by the BUYER and the attached contingency clause addendum shall apply.
□
This
sale is not contingent upon the sale of other property by the BUYER nor is the loan needed by the
BUYER to obtain the Sales Price contingent on the BUYER’S sale of any property.
Comments:
Line 42 - This checkbox should be selected if the sale of the Property is contingent
or conditioned upon the sale of another piece of property by the Buyer. If this
checkbox is selected, a contingency clause addendum which sets forth the specific
terms upon which the Buyer’s current property will be sold should be attached.
Lines 43 – 45 – On Line 43, a second checkbox is provided which should be
selected if the sale of the Property is not contingent upon the Buyer’s sale of
another piece of property.
7.
49
All Cash Sale
□ ALL CASH SALE: BUYER warrants he has cash readily available to close the sale of this Property.
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Comments:
Line 49 – This checkbox should be selected if the sale of the Property will be for all
cash. This means the Buyer is not obtaining financing to fund the Sales Price with
the Property being acquired used as collateral for the loan. The Buyer warrants
that he has cash readily available to fund the Sales Price.
8.
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
□
Financed Sale
FINANCED SALE: This sale is conditioned upon the ability of BUYER to borrow with this Property
as security for the loan the sum of $__(Amount of loan to be obtained)________________ or
_____% of the Sales Price by a mortgage loan or loans at an initial interest rate not to exceed
_____% per annum, interest and principal, amortized over a period of not less than _____ years,
payable in monthly installments or on any other terms as may be acceptable to BUYER provided that
these terms do not increase the cost, fees or expenses to SELLER. The loan shall be secured by:
□
Fixed Rate Mortgage;
Mortgage;
□
□
□ VA Guaranteed Mortgage; □ FHA Insured
Financing; □ Other __________________________.
Adjustable Rate Mortgage;
Owner Financing;
□
Bond
SELLER mandated fees required by lender on VA or FHA loans, if any, shall not exceed $___________.
BUYER agrees to pay discount points not to exceed _____% of the loan amount. Other financing
conditions:_________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________.
BUYER agrees to make good faith application, which includes ordering and paying for an appraisal and
credit report if required for loan approval, within _*____ calendar days of acceptance of this offer or
any counteroffer and written proof from the lender that the application has been made shall be
supplied by BUYER to the SELLER. Written commitment by the lender to make loan(s), without
contingencies except subject to approval of title, shall be obtained by BUYER and shall
constitute final loan approval. Final loan approval shall be obtained on or prior to
__*_________________. Any extension of this date shall be in writing and shall be signed by all
parties. BUYER authorizes and instructs lender to release to SELLER or SELLER’S Broker or Designated
Agent, written verification of the loan application and final loan approval. SELLER reserves the right to
provide all or part of mortgage loan(s) set forth above. The BUYER acknowledges and warrants that he
has available the funds which may be required to complete the sale of the Property including, but not
limited to, the deposit, the down payment, closing costs, pre-paid items, and other expenses.
* - Number of calendar days after acceptance of offer by which the Buyer will submit a loan
application. This includes Saturdays, Sundays and legal holidays.
* – Deadline for final loan approval.
Comments:
Lines 51 - 75 – This section provides the financial terms of the sale if the Sales
Price is to be financed by the Buyer.
Line 51 – This checkbox should be selected if the Sales Price is being financed by
the Buyer. This means that the Buyer will be borrowing money to pay the Sales
Price.
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Lines 52 – 55 – This line provides a blank for the amount of the loan which the
Buyer intends to obtain or if the Buyer does not know the amount of the loan a
blank is also provided in Line 53 for the amount of the loan to be expressed as a
percentage of the Sales Price. For example, the Buyer might include a term that
80% of the Sales Price will be financed by a mortgage loan or loans. This
paragraph also provides a blank for a maximum interest rate per annum if the
Buyer wishes to include this as a term of sale. Further, a blank is provided for
amortization of the loan. For example the Buyer may say that he must obtain a
mortgage loan for 80% of the Sales Price at an initial interest not to exceed 9% per
annum, interest and principal amortized over a period of not less than 30 years.
Lines 55 – 56 - These lines provide that the Buyer may agree to other loan terms
not stated in the financing terms in the lines above, so long as these different
financial terms do not increase the costs, fees or expenses to the Seller.
Lines 56 – 58 - The type of loan to be obtained by the Buyer is provided for in Lines
56 through 58 of the Statewide Purchase Agreement Form. These choices include a
fixed rate mortgage which is a mortgage in which the amount of interest is at a set
amount that does not change through the term of the mortgage. For example, an
8% mortgage that remains 8% from the beginning to the end of the term of the
loan. The second type of loan is an adjustable rate mortgage. In an adjustable
rate mortgage the interest rate is adjusted during the term of the mortgage. For
example, the interest rate might start at 8% the first year and increase to 9% after
5 years. The third type of loan is a VA Guaranteed Mortgage or FHA Insured
Mortgage. There is also a checkbox for Owner Financing, Bond Financing and an
“Other” checkbox if the type of financing is not included in the previous checkbox
selections.
Line 59 – This line provides a blank for the mandated fees, if any, required by
lender on VA or FHA loans. The maximum amount the Seller shall be required to
pay of these mandated fees should be included in this blank.
Line 60 – This line provides a space to list any discount points to be paid by the
Buyer.
Lines 61 – 63 – These lines provide a space for other financing conditions not
already included in this preprinted paragraph.
Lines 64 – 69 - These lines provide that the Buyer agrees to make good faith
financing application with the lender. This includes ordering and paying for an
appraisal and credit report if required for loan approval by the lender. A blank is
provided for the number of calendar days after acceptance of this offer or any
counteroffer that written proof from the lender of the loan application should be
supplied by the Buyer to the Seller. This means that the Buyer must make his
application for financing within a certain number of calendar days from acceptance
of the offer or counteroffer and then provide proof that the application has been
made to the Seller. This loan application proof could be supplied to either the Seller
or the Seller’s agent. The commitment by the lender to make loans without
contingencies except subject to title approval is considered final loan approval for
purposes of the Statewide Purchase Agreement Form.
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Line 70 - Final loan approval shall be obtained by the Buyer on or prior to the date
listed in the blank provided on Line 70. This blank is intended to require the Buyer
to obtain final loan approval prior to a date certain. The date provided in Line 70
may be the closing date or an earlier date prior to the closing date. Line 70 further
provides that any extension of the loan approval date shall be in writing and shall
be signed by the parties.
Lines 71 - 72 – This sentence gives the lender the authority to release to the Seller
or the Seller’s broker or designated agent, written verification that the loan
application has been made and final loan approval has been obtained.
Lines 72 – 73 – In this section, the Seller reserves the right to provide owner or
Seller financing upon the terms set forth in Lines 51 through 63 if the Seller decides
to do that in lieu of the traditional lender financing.
Lines 73 – 75 - In this section, the Buyer acknowledges and warrants that he has
available funds which may be required to complete the sale of the Property. This
includes the deposit, the downpayment, the closing cost, prepaid items and other
expenses. This section is also intended to give notice to the Buyer that there may
be costs that the Buyer will need to pay above the amount of the mortgage loan.
9.
77
78
79
80
81
82
83
84
85
86
87
88
89
Deposit
DEPOSIT: Upon acceptance of this offer, SELLER and BUYER shall be bound by all terms and
conditions of this Agreement, and BUYER or BUYER’S agent will deliver immediately upon notice of
acceptance of the offer a deposit (the “Deposit”) in the amount of $_(Deposit Amount)___________
or _____% of the Sales Price by
□
□
Cash $__(Cash Deposit Amount)__________________________
Check $__(Check Deposit Amount)______________________
□
Promissory Note in the amount
of $_(Promissory Note Deposit Amount)_________________ to be held by _____*_______________.
Failure to deliver the Deposit shall be considered a breach of this Agreement. If the Deposit is held by
a Broker, it must be held in accordance with the rules of the Louisiana Real Estate Commission in a
federally insured banking or savings and loan institution without responsibility on the part of the
Broker in the case of failure or suspension of such institution. In the event the parties fail to execute
an Act of Sale by date specified herein, and/or a dispute arises as to ownership of, or entitlement to,
the Deposit or funds held in escrow, the Broker shall abide by the Rules and Regulations set forth by
the Louisiana Real Estate Commission governing such matters.
* – Name of person or company holding the Deposit.
Comments:
Lines 77 - 89 – This section provides the Buyer shall make a Deposit. The Deposit
shall be delivered immediately upon acceptance of the offer. The amount of the
Deposit is the amount set forth in the blank provided on Line 79 or the percentage
of the Sales Price provided for with the blank on Line 80. The Deposit may be by
cash, if the checkbox on Line 80 is selected or check, if the checkbox on Line 81 is
selected. A Promissory Note may be used for the Deposit if the checkbox on Line
81 is selected. The Deposit may also be a combination of cash, check and
Promissory Note depending upon the terms agreed to by the parties.
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Line 82 – This line provides a blank for listing the amount of the Promissory Note
used for the Deposit if applicable. Line 82 further provides a blank for the name of
the person or company who shall hold the Deposit.
Line 83 – This line provides that failure to deliver the Deposit shall be considered a
breach of this contract.
Lines 84 - 89 – These lines provide that the rules and regulations on Deposits set
forth by the Louisiana Real Estate Commission governing Deposits shall apply to
this Statewide Purchase Agreement Form. See Louisiana Real Estate Commission
Rules and Regulations § 2901 et seq.
10.
91
92
93
Property and Flood Insurance
PROPERTY AND FLOOD INSURANCE: It is recommended that the BUYER make good faith
application for property and flood insurance, if applicable, on the Property as soon as possible after
acceptance of this offer.
Comments:
Lines 91 - 93 - This paragraph is intended to provide a reminder to the Buyer that
the Buyer should make a good faith application for property and flood insurance as
soon as possible after acceptance of the offer to purchase. Currently Louisiana
property owners are experiencing delays in obtaining property and flood insurance.
Buyers are encouraged to make application as quickly as possible if they desire to
obtain insurance prior to the closing.
11.
95
96
97
98
99
100
101
102
103
Appraisal
APPRAISAL:
□
This sale is NOT conditioned on appraisal.
□
This sale IS conditioned on the
appraisal of the Property being not less than the Sales Price. If the appraised value of the Property is
equal to or greater than the Sales Price, the BUYER shall pay the Sales Price agreed upon prior to the
appraisal. If the appraised value is less than the Sales Price, BUYER shall immediately provide written
notification to SELLER of appraised value and BUYER’S request for SELLER to reduce the Sales Price.
Within ______*___________________ (__*_____) calendar days after SELLER’S receipt of such
written notification of the appraised value, BUYER shall have the option to pay the Sales Price agreed
upon prior to the appraisal or to void this Agreement unless SELLER agrees in writing to reduce the
Sales Price to the appraised value or all parties agree to a new Sales Price.
* – Number of days given to Seller to respond to appraisal written out, for example “Seven”.
* – Numerical amount of days to be given to Seller to respond to the appraisal. For example (7).
Comments:
Lines 95 – 99 – This section provides checkboxes to select if the sale is subject to
an appraisal of the Property or if the Buyer will not require an appraisal of the
Property prior to the closing. The first checkbox should be selected if the sale is not
conditioned on appraisal of the Property as a condition of completing the sale. This
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means the Buyer does not desire to obtain appraisal of the Property. The second
checkbox on Line 95 should be selected if the sale is conditioned on appraisal of the
Property.
Lines 96 – 99 - The Statewide Purchase Agreement Form provides that if the
appraisal of the Property is for less than the Sales Price the Buyer may provide
written notice to the Seller of the appraised value and the Buyer’s request for the
Seller to reduce the Sales Price to the value shown on the appraisal.
Line 100 – 103 – This section provides that after delivery of this written notice to
the Seller, of the appraised value being lower than the Sales Price and the request
by the Buyer to reduce the Sales Price, the Buyer shall have the option to pay
either the Sales Price agreed upon in the Statewide Purchase Agreement Form or to
void the Statewide Purchase Agreement Form unless the Seller agrees to reduce
the Sales Price to the appraised value.
12.
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
Warranty or As Is Clause with Waiver of Right of Redhibition
WARRANTY OR AS IS CLAUSE WITH WAIVER OF RIGHT OF REDHIBITION: (CHECK ONE ONLY)
□
A. SALE WITH WARRANTIES: SELLER and BUYER acknowledge that this sale shall be with full
SELLER warranties as to any claims or causes of action including but not limited to redhibition
pursuant to Louisiana Civil Code Article 2520, et seq. and Article 2541, et seq.
□
B. SALE “AS IS” WITHOUT WARRANTIES: SELLER and BUYER hereby acknowledge and recognize
that the Property being sold and purchased is to be transferred in “as is” condition and further BUYER
does hereby waive, relieve and release SELLER from any claims or causes of action for redhibition
pursuant to Louisiana Civil Code Article 2520, et seq. and Article 2541, et seq. or for reduction of
Sales Price pursuant to Louisiana Civil Code Article 2541, et seq. Additionally, BUYER acknowledges
that this sale is made without warranty of fitness for ordinary or particular use pursuant to Louisiana
Civil Code Article 2524. SELLER and BUYER agree that this clause shall be made a part of the Act of
Sale.
□
C. NEW HOME WARRANTIES. Notwithstanding lines 108 through 118 and irrespective of whether A
or B above is checked, if the Property is a new construction, the parties agree that neither A or B will
apply but instead the provisions of the New Home Warranty Act (LA R.S. 9:3141 et seq.) shall apply.
The warranty of condition of this Property is governed by the New Home Warranty Act if a home on
the Property is a “home” as defined in the New Home Warranty Act.
Comments:
Lines 107 – 123 - Only one checkbox should be selected in this section.
Either the box on Line 108, 111 or 119 should be selected.
Line 108 – 110 – The checkbox on Line 108 should be selected if the sale of the
Property is made with warranty by the Seller to the Buyer. This means that the
Seller and Buyer acknowledge that the sale is with full warranty as to any claim or
cause of action, including redhibition. This clause should be reviewed in detail by
the Buyer and Seller.
Line 111 – The checkbox on Line 111 should be selected if the sale is “as is” and
without warranty. In this event the Seller is not providing any warranty to the
13
386279_1
Buyer and is selling the Property in “as is” condition. An “as is” clause notifies the
Buyer that the Property being sold may not be perfect condition and that generally
the Seller does not intend to correct or fix any defects. Waiver of redhibition is a
different term then selling property “as is”. See Wilston v. Noland, 888 So.2d 950
(La. Ct. App.1st Cir. 2004) Under Louisiana law, a Seller generally warrants that the
property sold is free of hidden or non-apparent defects. The existence of a
redhibitory defect gives the Buyer the right to void the sale on account of some vice
or defect in the property sold, which renders the property either absolutely useless,
or the property’s use is so inconvenient and imperfect that the Buyer would not
have purchased the property had the Buyer known of the defect. See Louisiana
Civil Code Article 2520 et seq. Generally, for a waiver of redhibitory defects or
redhibition to be effective, the waiver of the warranty must satisfy three
requirements. First, the waiver must be clear and unambiguous. Second, it must
be contained in the contract being signed by the Buyer and Seller and third, it must
be brought to the attention of the Buyer or explained to him. See Mitchell v.
Popiwchak, 677 So.2d 1050 (La. Ct. App. 4th Cir. 1996). If the checkbox on Line
111 is selected, this means that the Buyer is also waiving and releasing the Seller
from any causes of action for redhibition. This clause should be reviewed in detail
with the Buyer and Seller.
Lines 119 – 123 – The checkbox on Line 119 should be selected if property being
sold is new construction and will be covered by the New Home Warranty Act. The
New Home Warranty Act is provided for in LA R.S. 9:3142 et seq. This Act provides
by statute certain home warranties on new home construction.
13.
125
126
127
128
129
130
131
132
133
Prorations/Other Costs
PRORATIONS/OTHER
COSTS:
Real
estate
taxes,
rents,
assessments,
condominium
dues,
assessments and/or dues owed to homeowners associations and the like for the current year are to be
prorated through the date of the Act of Sale. Act of Sale costs, title insurance and other costs required
to obtain financing shall be paid by BUYER, unless otherwise stated herein. All necessary tax,
mortgage, conveyance and release certificates or cancellations and SELLER closing fees, if any, shall
be paid by SELLER. SELLER shall pay all previous years’ taxes, assessments, condominium dues,
assessments and/or dues owed to homeowners associations and the like. All special assessments
bearing against the Property, other than those to be assumed as of the date of sale are to be paid by
SELLER.
Comments:
Lines 125 - 131 - This section addresses the payment of costs such as real estate
or ad valorem taxes, rents (if property is leased), assessments made by
homeowner’s associations and condominium dues for the year in which the sale of
the Property occurs. This section provides that these costs listed will be prorated
through the date of the closing. For example, the Seller will pay the prorated costs
for the portion of the year in which the Seller owned the Property and the Buyer will
pay the portion of the year in which the Buyer owns the Property. All other costs of
the sale such as title insurance and financing costs shall be paid by the Buyer. Any
required Mortgage and Conveyance certificates and the cost of the cancellations of
mortgages shall be paid by the Seller.
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386279_1
Lines 132 – 133 – Special assessments against the Property which were assessed
prior to the date of the closing, unless assumed by the Buyer are to be paid by the
Seller on or prior to closing.
14.
135
136
137
138
139
140
141
142
143
144
145
Merchantable Title/Curative Work
MERCHANTABLE TITLE/CURATIVE WORK: SELLER shall deliver to BUYER a merchantable title at
SELLER’s costs (see line 141). In the event curative work in connection with the title to the Property is
required or is a requirement for obtaining the loan(s) upon which this Agreement is conditioned, the
parties agree to and do extend the date for passing the Act of Sale to a date not more than
_______________________________ (____) calendar days from the date of the Act of Sale stated
herein. SELLER’s title shall be merchantable and free of all liens and encumbrances except those that
can be satisfied at Act of Sale. All costs and fees required to make title merchantable shall be paid by
SELLER. SELLER shall make good faith efforts to deliver merchantable title. SELLER’s inability to
deliver merchantable title within the time stipulated herein shall render this Agreement null and void,
reserving unto BUYER the right to demand the return of the Deposit and to recover from SELLER
actual costs incurred in processing of sale as well as legal fees incurred by BUYER.
Comments:
Lines 135 – 136 – This section provides that the Seller shall deliver to Buyer a
merchantable title at Seller’s cost. Merchantable title is generally defined as a title
that is readily sold or mortgaged in the ordinary course of business by reasonable
persons familiar with the facts and questions involved. The Buyer cannot generally
be compelled to accept a title that exposes the Buyer to an unreasonable risk of
serious litigation. See Young v. Stevens, 252 La. 69, 209 So.2d 25 (1967).
Lines 136 – 140 – In the event the Seller needs to perform curative work in
connection with making the title merchantable or if curative work is required for
obtaining the loan by the Buyer, a blank is provided to insert a date for extending
the time for passage of the Act of Sale for the curative work to be completed.
Lines 140 – 141 – This line provides that the Seller’s title to the Property shall be
free of all liens and encumbrances except those that are to be paid at the closing.
For example, the Seller may have an existing mortgage on the Property. This
mortgage presumably would be paid at the time of the closing with the sales
proceeds.
Lines 141 – 142 – These lines provide all costs and fees which includes attorney’s
fees required to make a title merchantable shall be paid by the Seller.
Lines 142 – 145 – The Seller shall make a good faith effort to deliver a
merchantable title. The Seller’s inability to deliver the merchantable title within the
time for closing or an extension as provided for in Line 139 renders the contract
null and void. This reserves to the Buyer the right to demand return of the Deposit
and to recover from the Seller any actual costs incurred by the Buyer as well as any
legal fees incurred by the Buyer.
15
386279_1
15.
147
148
149
Leases
LEASES: If there are written leases on the Property, the Property will be sold subject to those leases.
The sale is conditioned upon BUYER'S written approval of copies of all such leases within five (5)
calendar days of receipt of the Leases.
Comments:
Lines 147 - 149 - The Seller is required to provide the Buyer with copies of any
written leases that affect the Property being sold. The sale of the Property is
conditioned upon the Buyer’s written approval of these leases within five calendar
days of receipt of the leases by the Buyer.
16.
151
152
153
154
155
Act of Sale
ACT OF SALE: The Act of Sale is to be executed before a settlement agent or Notary Public to be
chosen by BUYER, on _________________________, 20_____. At closing, BUYER must provide
"good funds" if required by Louisiana statute LA R.S. 22:2092.2 et seq. Any change of the date for
execution of the Act of Sale must be mutually agreed upon in writing and signed by SELLER and
BUYER. Security deposits, keys and leases are to be transferred to BUYER at Act of Sale.
Comments:
Lines 151 - 152 – These lines provide that the Act of Sale will be signed before a
settlement agent or notary public. This notary or settlement agent will be selected
by the Buyer. A blank is provided in Line 152 for the date of the closing.
Lines 152 – 153 - Provides that the Buyer must provide good funds as required by
Louisiana law at the closing. Good funds include:
(a) Cash.
(b) Wire transfers unconditionally received by the title insurer or the
title insurance agent or the depository of the insurer or agent.
(c) A depository check, including a certified check, cashier's check, or
teller's check as defined by the Expedited Funds Availability Act, 12 U.S.C.
4001 et seq.
(d) A personal check or other item which has been presented for
payment and for which funds have been unconditionally collected by the title
insurer or the title insurance agent.
(e) Credit transfers through the Automated Clearing House which have
been deemed available by the depository institution receiving the credit. The
credit shall conform to the operating rules established by the National
Automated Clearing House Association.
(f) Checks unconditionally issued by mortgage lenders which are
subject to periodic audit by the Department of Housing and Urban
16
386279_1
Development or the secretary of Veterans Affairs, and which are drawn on
financial institutions insured by the Federal Deposit Insurance Corporation.
(g) A check or checks, drawn on the trust account or sales escrow
account of the real estate broker licensed under R.S. 37:1430 et seq., in an
amount up to the amount of the then current guarantee provided by the Real
Estate Recovery Fund as established in R.S. 37:1463.
Lines 153 - 155 – These lines provide any change in the date for the closing that is
set forth on Line 152 must be mutually agreed upon in writing by the Buyer and the
Seller.
Line 155 – This line provides that any security deposits and the keys are to be
transferred to the Buyer on the date of the Act of Sale. This line further provides if
the Property is subject to a lease, the lease will be assigned to the Buyer at closing.
17.
157
Occupancy
OCCUPANCY: Occupancy is to be granted at Act of Sale or on _____________ at _______ A.M. /P.M.
Comments:
Line 157 – This line provides a blank for inserting the date and time the Buyer is
granted occupancy of the Property. Occupancy will be granted at Act of Sale unless
a different date is provided in this blank.
18.
Inspection and Due Diligence
159
160
161
162
163
164
INSPECTION AND DUE DILIGENCE: BUYER ACKNOWLEDGES THAT THE SALES PRICE OF THE
PROPERTY WAS NEGOTIATED BASED UPON THE PROPERTY'S APPARENT CURRENT CONDITION;
ACCORDINGLY, SELLER IS NOT OBLIGATED TO MAKE REPAIRS TO THE PROPERTY, INCLUDING
REPAIRS REQUIRED BY THE LENDER UNLESS OTHERWISE STATED HEREIN. THE SELLER IS
RESPONSIBLE FOR MAINTAINING THE PROPERTY IN SUBSTANTIALLY THE SAME OR BETTER
CONDITION AS IT WAS WHEN THE AGREEMENT WAS FULLY EXECUTED.
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
BUYER shall have an inspection period of (
) calendar days, commencing the first day after
acceptance of this Agreement wherein, BUYER may, at BUYER’S expense, have any inspections made
by experts or others of his choosing. Such inspections may include, but are not limited to, inspections
for termites and other wood destroying insects, and/or damage from same, molds, and fungi hazards,
and analysis of synthetic stucco, appliances, structures, foundations, roof, heating, cooling, electrical,
plumbing systems, utility and sewer availability and condition, out-buildings, square footage, school
district, flood zone classifications, current zoning and/or subdivision restrictive covenants and any
items addressed in the SELLER’S Property Disclosure Document. All testing shall be nondestructive
testing. SELLER agrees to provide the utilities for inspections and immediate access. If BUYER is not
satisfied with the current condition of the Property as reflected in the inspection reports:
Option 1: BUYER may elect, in writing, to terminate the Agreement and declare the Agreement null
and void; or
Option 2: BUYER may indicate in writing the deficiencies and desired remedies and SELLER will have
seventy-two (72) hours to respond in writing as to SELLER’s willingness to remedy those deficiencies
(“SELLER’s Response”).
17
386279_1
186
187
188
189
190
191
192
193
194
195
196
197
Should SELLER in the SELLER’S Response refuse to remedy any or all of the deficiencies listed by the
BUYER, then BUYER shall have twenty-four (24) hours from the date of SELLER's Response or twentyfour (24) hours from the date that SELLER's Response was due, whichever is earlier, to: (a) accept
SELLER'S Response to BUYER’S written requests or (b) accept the Property in its current condition, or
(c) to elect to terminate this Agreement. BUYER’S response shall be in writing. Upon BUYER'S failure
to respond to the SELLER’s Response by the time specified or BUYER’S electing, in writing, to
terminate this Agreement, the Agreement shall be automatically, with no further action required by
either party, ipso facto null and void except for return of Deposit to the BUYER. FAILURE TO MAKE
INSPECTIONS OR TO GIVE WRITTEN NOTICE OF DEFICIENCIES AND DESIRED REMEDIES TO SELLER
(OR SELLER’S DESIGNATED AGENT) AS SET FORTH IN LINES 180 THROUGH 184 WITHIN THE
INSPECTION PERIOD SHALL BE DEEMED AS ACCEPTANCE BY BUYER OF THE PROPERTY'S CURRENT
CONDITION.
Comments:
Lines 159 – 164 – This section addresses the Buyer’s ability to inspect the Property
and conduct whatever due diligence the Buyer deems necessary regarding the
Property. In this first paragraph of the inspection section, the Buyer acknowledges
that the Sales Price of the Property was negotiated based on the Property’s current
and apparent condition. Further, this section states that the Seller is not obligated
to make repairs to the Property including any repairs which are suggested or
required by the lender unless repairs are otherwise provided for in the agreement.
The Seller is responsible though for maintaining the Property in substantially the
same or better condition as it was when the offer was accepted.
Lines 169 – 171 – This section provides a blank for a number of calendar days the
Buyer shall have to inspect or conduct due diligence regarding the Property. The
inspection period begins to run the first day after acceptance of the offer. Any
inspections of the Property shall be at the Buyer’s expense and conducted by
experts or individuals of the Buyer’s choosing.
Lines 171 – 176 – These lines provide that the Buyer’s inspections can include
many different types of inspections. This is an illustrative and not exclusive list of
inspections that the Buyer may choose to employ.
Lines 176 – 177 – The testing conducted by the Buyer shall be nondestructive
unless other agreement is reached with the Seller. This means the Buyer may not
destroy any portion of the Property during the testing period in order to gain data
needed for testing without the written approval of the Seller.
Line 177 – This line provides that the Seller shall supply the utilities for inspections
and access to the Property for the Buyer.
Lines 177- 178 – This begins the section which addresses the result if the Buyer is
not satisfied with the current condition of the Property after his due diligence
investigation or inspection.
18
386279_1
Lines 180 – The first option the Buyer may have if the Buyer is not satisfied with
the condition of the Property after inspection is that the Buyer may elect in writing
to terminate the contract and declare the contract null and void.
Lines 182 – 184 – If the Buyer is not satisfied with the current condition of the
Property after inspection, the second option the Buyer may have is to indicate in
writing the deficiencies and desired remedies to the Seller. The Seller will then
have 72 hours to respond in writing to the Buyer as to the Seller’s willingness to
correct these defects alleged by the Buyer.
Lines 186 – 193 – These lines address the result if the Buyer selects the second
option after being dissatisfied with the Property inspection and the Seller refuses to
remedy the deficiencies. Should the Seller in the Seller’s response to the Buyer’s
request, refuse to remedy any and all of the deficiencies listed by the Buyer, then
the Buyer has 24 hours from the date of Seller’s response or 24 hours from the
date the Seller’s response was due, whichever is earlier, to either first accept the
Seller’s response to the Buyer’s written request or second, accept the Property in its
current condition or third, elect to terminate the contract. The Buyer’s decision
after the Seller’s response shall be in writing. If the Buyer fails to respond in
writing to the Seller’s response to the Buyer’s dissatisfaction with the Property
condition in the time specified, then the contract is automatically void except for
return of the Deposit to the Buyer.
Lines 193 – 197 – If the Buyer chooses not to make inspections or not to give any
notice of any deficiencies in the Property or remedies desired from the Seller, the
inspection period shall be deemed an acceptance by the Buyer of the Property’s
current condition.
19.
199
200
201
202
203
204
205
Private Water/Sewerage
PRIVATE WATER/SEWERAGE: In the event there is a private water system or private sewerage
system on the Property, this Agreement
□
is;
□
is not; contingent upon an approval by the
appropriate governmental entity of the private water or sewerage system. An approved sewerage
and/or water inspection report, if requested by the lender, BUYER or other governmental entity will be
issued within thirty (30) days prior to the Act of Sale by the appropriate governmental agency. The
inspection and test on the water and/or sewerage system are to be furnished and paid for by the
SELLER.
Comments:
Lines 199 - 201 – These lines provide checkboxes to determine whether the sale is
contingent upon the approval of the private water or sewerage system. If this sale
is conditioned upon approval by appropriate governmental entity of the private
water sewerage system, the checkbox “is” should be selected. If the Property is
not being sold subject to approval of a private water system or private sewerage
system, then the checkbox “is not” should be selected.
19
386279_1
Lines 201 - 203 – These lines provide that the approval of the sewerage system
and/or water inspection report must be issued within thirty days prior to the Act of
Sale by the appropriate governmental agency.
Lines 203 - 205 – These lines provide that the inspection or test of the water and
sewerage system is to be paid for by the Seller.
20.
207
208
209
210
211
212
213
214
215
Home Warranty Program
HOME WARRANTY PROGRAM: A home warranty plan will be purchased at the closing of sale at a
cost not to exceed $___*________________________ to be paid by
□ BUYER, □ SELLER, □ Neither,
and ordered by ___*__________________________. It is understood that Agent/Broker may receive
compensation from the home warranty company. The home service warranty plan does not warrant
pre-existing defects and options, and does not supersede or replace any other inspection clause or
responsibilities. If neither BUYER nor SELLER accepts the home service warranty plan, they declare
that they have been made aware of the existence of such a plan and its advantages by the Broker,
and further declare they hold the Broker and Agents harmless from any responsibility or liability due
to their rejection of such a plan.
* - Maximum amount of cost of home warranty plan which either party agrees to pay.
* - Name of party who will order the home warranty plan.
Comments:
Lines 207 - 215 – These lines provides for the purchase of a home service warranty
program should the Buyer or Seller desire to purchase one.
Line 208 – This line provides a blank for the maximum amount of the cost of the
home warranty plan which either party agrees to pay for a home service warranty
program. A checkbox is provided for either the Buyer, Seller or neither to agree to
purchase a home service warranty program.
At least one of these three
checkboxes should be checked either “Buyer”, “Seller” if a home service warranty
program is being purchased or “neither” if a home warranty program is not being
purchased.
Line 209 - A blank is provided for the name of the party who will order the home
warranty plan.
Lines 210 – 212 – These lines provide disclosure that the agent or broker may
receive compensation from the home warranty company and that the home
warranty plan does not warrant certain defects, and further does not replace any
other inspection by the Buyer.
Lines 212 - 215 - This is an acknowledgment of the Buyer and Seller that they have
been advised of the existence of a home warranty plan and its advantages by the
20
386279_1
broker. The Buyer and Seller declare they further hold the broker and agents
harmless for any responsibility or liability due to their rejection of their plan should
they decide to reject the purchase of a home service warranty program.
21.
217
218
219
220
221
Final Walk Through
FINAL WALK THROUGH: BUYER shall have the right to re-inspect the Property within five (5) days
prior to the Act of Sale, or occupancy, whichever will occur first in order to determine if the Property is
in the same or better condition as it was at the initial inspection(s) and to insure all agreed upon
repairs have been completed. SELLER agrees to provide utilities for the final walk through and
immediate access to the Property.
Comments:
Lines 217 - 221 – These lines provide for the final walkthrough of the Buyer to
inspect the Property prior to the closing. The Buyer has the right to re-inspect the
Property within five days prior to the Act of Sale or occupancy of the Property,
whichever occurs first. The purpose of this final walkthrough is to determine if the
Property is in the same or better condition as it was when it was initially inspected
by the Buyer. The Seller agrees to provide utilities for the final walkthrough and
access to the Buyer to the Property for the inspection.
22.
Return of Deposit
223
224
RETURN OF DEPOSIT: The Deposit shall be returned to the BUYER and this Agreement declared null
and void without demand in consequence of the following events:
229
230
231
232
233
234
235
236
237
238
239
240
1) If this Agreement is declared null and void by BUYER during the inspection period as set forth in
lines 180 through 197 of this Agreement;
2) If this Agreement is subject to BUYER’S ability to obtain a loan and the loan is not obtained by the
date set forth in lines 64 through 70 of this Agreement but only if the BUYER has made timely
application for the loan and made good faith efforts to obtain the loan;
3) If the BUYER conditions the Sales Price on an appraisal and the appraisal is less than the Sales
Price and the SELLER will not reduce the Sales Price as set forth in lines 95 through 103 of this
Agreement;
4) If the Property being sold subject to the existing leases and BUYER does not accept the leases as
set forth in lines 147 through 149 of this Agreement;
5) If the BUYER is unable to obtain property insurance on the Property prior to the date for passing
the Act of Sale, but only if BUYER has in good faith applied for property insurance.
Comments:
Lines 223 – 224 – This section deals with the return of the Deposit to the Buyer in
the event the agreement is declared null and void. This section outlines in what
events the Buyer receive return of his Deposit without demand made to the Seller.
21
386279_1
Lines 229 – 230 – These lines provide that the Buyer shall receive return of his
Deposit in the event that the Buyer is not satisfied with the inspection of the
Property and the Seller and Buyer are unable to reach an agreement for repair of
the Property as set forth in Lines 180 – 197 of the agreement.
Lines 231 – 233 – The Buyer shall receive return of his Deposit if the sale is
contingent upon the Buyer’s ability to obtain a loan and the loan is not obtained by
the Buyer. This is only in the event that the Buyer has timely made application for
the loan and used good faith efforts to obtain the loan. The loan application
process is set forth in Lines 64 – 70 of the Statewide Purchase Agreement Form.
Lines 234 – 236 – If the Buyer has conditioned the Sales Price on an appraisal, and
the appraisal received is for less than the amount of the Sales Price and further the
Seller does not agree to reduce the Sales Price, then the Buyer shall receive return
of his Deposit. The appraisal process is set forth in Lines 95 – 103 of the Statewide
Purchase Agreement Form.
Lines 237 – 238 – If the Buyer is buying the Property subject to existing leases on
the Property and after receipt of the existing leases, the Buyer is not satisfied with
the leases, the Buyer is entitled to return of his Deposit. The lease review process
is set forth in Lines 147 – 149 of the Statewide Purchase Agreement Form.
Lines 239 – 240 – If the Buyer is unable to obtain property insurance on the
Property prior to the date set forth for passing the Act of Sale, then the Buyer may
obtain return of his Deposit and declare the Statewide Purchase Agreement Form
null and void. This return of Deposit is only in the event that the Buyer has in good
faith applied for the property insurance.
23.
242
243
244
245
246
247
248
249
250
251
252
Default of Agreement by Seller
DEFAULT OF AGREEMENT BY SELLER: In the event of any other default of this Agreement by
SELLER except as set forth in lines 142 through 145 or lines 223 through 240, BUYER shall at BUYER’S
option have the right to declare this Agreement null and void with no further demand, or to demand
and/or sue for any of the following:
1) Termination of this Agreement;
2) Specific performance;
3) Termination of this Agreement and an amount equal to 10% of the Sales Price as stipulated
damages.
Further, BUYER shall be entitled to the return of the Deposit. The prevailing party to any litigation
brought to enforce any provision of this Agreement shall be awarded their attorney fees and costs.
The SELLER may also be liable for Broker fees.
Comments:
Lines 242 – 252 – This section provides the remedy in the event of a default by the
Seller. This is exclusive of any return of Deposit rights contained in Lines 142 –
145 or Lines 223 – 240. In the event of a default by the Seller, the Buyer has the
22
386279_1
option of (1) terminating the agreement, (2) suing for specific performance, or (3)
terminating the agreement and suing for amount equal to 10% of the Sales Price as
stipulated damages.
Lines 250 – 252 – This provides that in the event of default by the Seller, the Buyer
is also entitled to the return of the Deposit. This further provides that the
prevailing party to any litigation if a suit is filed to enforce or terminate this
agreement shall be awarded their attorney’s fees and costs. This section also
provides on Line 252 that the Seller may be liable for broker’s fees.
24.
254
255
256
257
258
259
260
261
262
263
Default of Agreement by Buyer
DEFAULT OF AGREEMENT BY BUYER: In the event of any other default of this Agreement by BUYER
except as set forth in lines 223 through 240, SELLER shall have at SELLER’s option the right to declare
this Agreement null and void with no further demand, or to demand and sue for any of the following:
1) Termination of this Agreement;
2) Specific performance;
3) Termination of this Agreement and an amount equal to 10% of the Sales Price as stipulated
damages.
Further, SELLER shall be entitled to retain the Deposit. The prevailing party to any litigation brought to
enforce any provision of this Agreement shall be awarded their attorney fees and costs. The BUYER
may also be liable for Broker fees.
Comments:
Lines 254 – 260 – This section provides the remedy in the event of a default by the
Buyer. This is exclusive of any required return of Deposit rights contained in Lines
223 – 240. In the event of a default by the Buyer, the Seller has the option of (1)
terminating the agreement, (2) suing for specific performance, or (3) terminating
the agreement and suing for amount equal to 10% of the Sales Price as stipulated
damages.
Lines 261 – 263 - Further the Seller will also be entitled to retain the Deposit if it is
Buyer’s default. Again the provision that the prevailing party to any litigation
brought to enforce any provision of this agreement shall be awarded their
attorney’s fees and costs.
25.
265
266
267
268
269
Mold Related Hazards Notice
MOLD RELATED HAZARDS NOTICE: An informational pamphlet regarding common mold related
hazards
that
can
affect
real
property
is
available
at
the
EPA
website
http://www.epa.gov/iaq/molds/index.html. By initialing this page of the Agreement, BUYER
acknowledges that the real estate agent has provided BUYER with the EPA website enabling BUYER to
obtain information regarding common mold related hazards.
23
386279_1
Comments:
Lines 265 - 269 – This section provides the mold related hazards disclosure. An
informational pamphlet on mold related hazards is available at the Environmental
Protection Agency website in this paragraph. The Buyer can access this website to
learn more about mold related hazards. When the Buyer initials this page of the
Statewide Purchase Agreement Form, the Buyer is acknowledging that they have
been made aware of the website and the ability to access same to learn more about
common mold hazards.
This section is intended to be in compliance with LA R.S. 37§1470 which requires a
real estate licensee to deliver a mold educational pamphlet or website to the Buyer
before a contract is entered into by the parties.
26.
271
272
273
274
275
276
277
Offender Notification
OFFENDER NOTIFICATION: The Louisiana State Police maintains the State Sex Offender and Child
Predator Registry through the Louisiana Bureau of Criminal Identification and Information. It is a
public access database of the locations of individuals who are required to register pursuant to LA R.S.
15:540 et seq. The website for the database is http://www.lasocpr.lsp.org/socpr/. Sheriff
and police departments serving jurisdictions of 450,000 also maintain such information. Inquiries can
be made by phone at 1-800-858-0551 or 1-225-925-6100. Send written inquiries to Post Office Box
66614, Box A-6, Baton Rouge, Louisiana 70896.
Comments:
Lines 271 - 277 – These lines contain the notification to the Buyer in compliance
with the federal law known as Megan’s law that the website is available for
determining if a registered state sex offender or child predator is residing within the
neighborhood where the Property is being purchased. The telephone numbers for
contacting the appropriate agency and the address is also contained in this
paragraph. This paragraph is in compliance with the Louisiana License Law LA R.S.
37§1469 which provides:
A. Every written lease or rental agreement executed by any
licensee for residential immovable property and every written contract
for sale of residential immovable property shall contain a notice of the
availability to the public of access to a statewide database disclosing
the locations of individuals required to register pursuant to R.S.
15:540 et seq. The notice shall include the telephone number and
Internet site for the statewide database.
B. Upon delivery of the notice to the lessee or transferee of the
residential immovable property, the lessor, seller, broker, or licensee is
not required to provide any information in addition to that contained in
the notice regarding the proximity of registered sex offenders. The
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information in the notice shall be deemed to be adequate to inform the
lessee or transferee about the existence of a statewide database of the
locations of registered sex offenders and information from the
database regarding those locations. The information in the notice shall
not give rise to any cause of action against the disclosing party by a
registered sex offender or other parties to the transaction.
27.
279
280
Choice of Law
CHOICE OF LAW: This Agreement shall be governed by and shall be interpreted in accordance with
the laws of the State of Louisiana.
Comments:
Lines 279 - 280 – This section provides that the Statewide Purchase Agreement
Form shall be governed by Louisiana law.
28.
282
283
284
Deadlines
DEADLINES: TIME IS OF THE ESSENCE, and all deadlines are final, except where modifications,
changes, or extensions are made in writing and signed by all parties to this Agreement. All “calendar
days” as used in this Agreement shall end at 12:00 midnight in Louisiana.
Comments:
Lines 282 - 284 – This section provides that all deadlines are essential to parties in
the purchase of the Property. Calendar days are used throughout the Statewide
Purchase Agreement Form. This means every day of every year counts towards
any deadline. This includes weekends and holidays. A calendar day ends at 12:00
midnight in Louisiana.
29.
288
289
290
291
292
293
294
295
296
297
Additional Terms and Conditions
ADDITIONAL TERMS AND CONDITIONS:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
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Comments:
Lines 289 - 297 – This section provides blank lines for either the Buyer or Seller
making the offer to write in any additional terms which may be needed.
30.
299
300
301
Contract
CONTRACT: This is a legally binding contract when signed by both SELLER and BUYER. READ IT
CAREFULLY. If you do not understand the effect of any part of this Agreement seek legal advice before
signing this contract or attempting to enforce any obligation or remedy provided herein.
Comments:
Lines 299 - 301 – These lines provide a disclosure to the Seller and the Buyer that
they should carefully read the contract. If this Seller or Buyer does not understand
the effect of any part of this contract, they should seek legal advice before signing
the contract or attempting to enforce any obligation or remedy provided in the
contract.
31.
303
304
305
306
307
308
309
310
311
312
313
314
315
316
317
318
319
320
321
322
Roles of Brokers and Designated Agents
ROLES OF BROKERS AND DESIGNATED AGENTS: Broker(s) and Designated Agent(s) have acted
only as real estate brokers to bring the parties together and make no warranty to either party for
performance or non-performance of any part of this Agreement or for any warranty of any nature
unless specifically set forth in writing. Broker(s) and Designated Agent(s) make no warranty or other
assurances whatsoever concerning Property measurements, square footage, room dimensions, lot
size, Property lines or boundaries. Broker(s) and Designated Agent(s) make no representations as to
suitability or to a particular use of the Property, and BUYER has or will independently investigate all
conditions and characteristics of the Property which are important to BUYER. BUYER is not relying on
the Broker(s) nor the Designated Agent(s) to choose a representative to inspect or re-inspect the
Property; BUYER understands any representative desired by BUYER may perform this function. In the
event Broker/Agent(s) provides names or sources for such advice or assistance, Broker/Agent(s) does
not warrant the services of such experts or their products and cannot warrant the condition of
Property or interest to be acquired, or guarantee that all defects are disclosed by SELLER(s).
Broker/Agent(s) do not investigate the status of permits, zoning, code compliance or restrictive
covenants. The Broker(s) and Designated Agent(s) specifically make no warranty whatsoever as to
whether or not the Property is situated in or out of the Government’s hundred year flood plan or is or
would be classified as wetlands by the U.S. Army Corp. of Engineers, or as to the presence of wood
destroying insects or damage therefrom. BUYER(s) are to satisfy themselves concerning these issues.
Designated Agent shall be an independent contractor for Broker if the conditions as set forth in LA R.S.
37:1446(h) are met.
Comments:
Lines 303 - 322 – This section discloses the role of the broker and the designated
agents in providing service to the Seller or Buyer.
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Lines 303 – 306 – These lines state that the broker and designated agent make no
warranty to either party regarding the performance or compliance by the Buyer or
the Seller of the contract.
Lines 306 – 311 – These lines further describe the warranties that the broker and
designated agents do not make to Buyers and Sellers. This includes any warranty
relating to measurements of rooms, boundary lines or representations of the
suitability of the Property for a particular use. This section of the Statewide
Purchase Agreement Form advises the Buyer to make an independent investigation
of all conditions and characteristics of the Property which the Buyer believes are
important.
Lines 310 – 312 – These lines provide that the Buyer should not rely on the broker
or the designated agent to choose an expert to inspect or reinspect the Property.
The Buyer is free to choose whatever representative or expert they desire to
perform inspection or appraisals.
Lines 312 – 315 – These lines disclose that if the broker or designated agent
provides a name of an expert for inspection or other expert, then the broker or
designated agent does not warrant the services of this expert.
Lines 316 – 317 – These lines advise the Buyer that the broker and designated
agent did not investigate the status of any zoning or permitting on the Property.
This includes any restrictive covenants such as homeowner association or building
restrictions on the Property.
Lines 317 – 320 – These lines provide that the broker and designated agent did not
investigate whether the Property is in a flood zone.
Lines 320 – 321 – These lines provide that the designated agent may be an
independent contractor of the broker.
32.
324
325
326
Singular – Plural Use
SINGULAR – PLURAL USE: Wherever the word BUYER or the word SELLER occurs in this Agreement
or is referred to, the same shall be construed as singular or plural, masculine or feminine or neuter, as
the case may be.
Comments:
Lines 324 – 326 – This section provides that whenever the term “Buyer” or “Seller”
is used this includes both the male or female as well as the singular or plural of the
words. Therefore, the word “Seller”, would include both “Sellers” should there be a
two Sellers, for example, a husband and wife.
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33.
328
329
330
331
332
Acceptance
ACCEPTANCE: Acceptance of this Agreement must be in writing. Notice of this acceptance may be
communicated by facsimile transmission. The original of this document shall be delivered to the listing
Broker’s firm. This Agreement and any supplement addendum or modification relating hereto,
including any photocopy, facsimile or electronic transmission thereof, may be executed in two or more
counterparts, all of which shall constitute one and the same Agreement.
Comments:
Line 328 – This line provides that the acceptance of an offer to purchase made on
this Statewide Purchase Agreement Form must be in writing. The Buyer’s offer to
purchase may only be accepted by the Seller in writing.
Lines 328 – 329 – These lines further provide that notice of the acceptance of the
offer may be communicated by facsimile transmission or fax. This means that a
fax of the signature of the Seller will have the same force and effect as the original
signature.
Lines 329 – 330 – These lines provide the original executed version of the
Statewide Purchase Agreement Form shall be delivered to the listing broker’s firm.
The listing broker shall retain the original signed contract.
Lines 330 – 332 – These lines provide that the Statewide Purchase Agreement Form
may be executed in counterparts. This means that a copy of the Statewide
Purchase Agreement Form could be signed by the Buyer. A separate copy of the
Statewide Purchase Agreement Form can be signed by the Seller.
These two
contracts will be treated as a single agreement for all legal purposes.
34.
334
335
336
337
338
339
340
341
List Addenda to Be Attached and Made a Part of this Agreement
LIST ADDENDA TO BE ATTACHED AND MADE A PART OF THIS AGREEMENT: If any of the preprinted portions of this Agreement vary or are in conflict with any handwritten terms or Addendum
attached to this Agreement, the handwritten or Addendum provisions control.
[ ] Contingency for Sale of Buyer’s Other Property Addendum
[ ] Condominium Addendum
[ ] ______________________________________________
[ ] ______________________________________________
[ ] ______________________________________________
Comments:
Lines 334 – 336 – These lines provide that if there are any addenda attached to this
Statewide Purchase Agreement Form, the terms on the addendum shall control
should they conflict with the printed portions of the Statewide Purchase Agreement
Form.
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Lines 337 – 341 – These lines provide checkboxes and blanks to check off or list
addenda that may be attached and therefore, incorporated into the Statewide
Purchase Agreement Form.
35.
343
344
Expiration of Offer
EXPIRATION OF OFFER:
This offer remains binding and irrevocable until ___________________ AM/PM/MIDNIGHT/NOON.
Comments:
Lines 343 – 344 – These lines provide a blank to fill in the deadline to accept the
offer.
Line 344 – Provides a space to put a date through which the offer to purchase or
sell remain binding on the Buyer or Seller and irrevocable by the offering party.
This generally means that the Buyer or Seller cannot withdraw the offer to buy or
sell prior to that date.
36.
348
349
Entire Agreement
ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement between the parties, and
any other agreements not incorporated herein in writing are void and of no force and effect.
Comments:
Line 348 – 349 – These lines provide that this Statewide Purchase Agreement Form
is the entire agreement between the parties and there is no other previous writings
that supersedes or alters and amends this contract signed by the parties.
351
352
353
354
355
356
357
358
359
360
361
362
363
364
365
366
367
368
369
370
371
X__(Signature of Buyer)_______________
Signature of Buyer
Date/Time
__(Print Buyer’s Name)____________
X__________________________________
Signature of Buyer
__________________________________
Print Buyer’s Full Name (First, Middle, Last)
Print Buyer’s Full Name (First, Middle, Last)
_(Print Street Address)___________
__________________________________
Street Address
_(City, State, Zip)_______________
Street Address
__________________________________
City, State, Zip
City, State, Zip
[_*___]___________________________
Last 4-digits of SSN
[______]__________________________
Telephone #.Cell
Last 4-digits of SSN
_(Telephone numbers of Buyer)_____
Telephone #.Home
Telephone #.Cell
_________________________________
Telephone #.Work
Telephone #.Home
__(E-mail of Buyer)_______________
Telephone #.Work
________________________________
E-Mail Address
E-Mail Address
* - The last four digits of the Buyer’s social security number.
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Date/Time
Comments:
Line 351 – This is the line for the signature of the Buyer and the date and time the
Buyer signs. Two lines are provided for the Buyers to sign the offer.
Line 354 – This line is for printing the Buyer’s name.
Line 357 – This line is for printing the current street address of the Buyer.
Line 360 – This line is for printing the city, state and zip code of the Buyer.
Line 363 – This line provides a space for the last four digits of the Buyer’s social
security number. This information is provided to assist the title attorney or title
company in searching the title.
372
373
_________________________________________________________________________
This offer was presented to the Seller by
Day Date Time AM / PM MIDNIGHT/NOON
Comments:
Line 372 – This line provides a blank space for the broker or designated agent to
insert the name of the party who presented the offer to the Seller and the date and
time of the presentation.
375
This offer is:
□ Accepted □ Rejected (w/out counter) □ Countered (See Attached Counter) by:
Comments:
Line 375 – This line provides checkboxes to select whether the offer was Accepted,
Rejected (without Counteroffer) or Countered.
If the offer is Countered, a
Counteroffer should be attached.
377
378
379
380
381
382
383
384
385
386
387
388
389
390
391
392
393
394
395
396
397
X__(Signature of Seller)___________
Signature of Seller
X__________________________________
Date/Time
__(Print Seller’s Name)___________
Print Seller’s Full Name (First, Middle, Last)
___(Print Street Address)_____________
Street Address
Signature of Seller
Date/Time
__________________________________
Print Seller’s Full Name (First, Middle, Last)
__________________________________
Street Address
__(City, State, Zip)___________________
__________________________________
[_*___]___________________________
[______]__________________________
City, State, Zip
Last 4-digits of SSN
City, State, Zip
Telephone #.Cell
Last 4-digits of SSN
_(Telephone numbers of Seller)_____
Telephone #.Home
__________________________________
Telephone #.Work
Telephone #.Home
__(E-mail of Seller)_______________
Telephone #.Work
__________________________________
E-Mail Address
E-Mail Address
* - The last four digits of the Seller’s social security number.
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Telephone #.Cell
Comments:
Line 377 – This is the line for the signature of the Seller and the date and time the
Seller signs. Two lines are provided for the Sellers to sign the offer.
Line 380 – This line is for printing the Seller’s name.
Line 384 – This line is for printing the current street address of the Seller.
Line 386 – This line is for printing the city, state and zip code of the Seller.
Line 389 – This line provides a space for the last four digits of the Seller’s social
security number. This information is provided to assist the title attorney or
company in searching the title.
398
399
_________________________________________________________________________
The Seller’s response was presented to the Buyer by
Day Date Time AM / PM MIDNIGHT/NOON
Comments:
Line 398 – This line provides a blank space for the broker or designated agent to
insert the name of the party who presented the Seller’s response to the Buyer and
the date and time of the presentation.
37.
401
402
403
404
405
406
407
408
409
410
411
Property Disclosure Document
PROPERTY DISCLOSURE DOCUMENT:
□ Attached to this offer is the SELLER’S completed property disclosure document dated ___________.
The property disclosure agreement is issued pursuant to LA R.S. 9:3196 et seq. and was completed in
good faith to the best of the SELLER’S knowledge. This document sets forth the minimum disclosure
requirements for sellers of residential real estate as to the condition of the Property. THIS DOCUMENT
IS NOT TO BE CONSIDERED A WARRANTY BY THE SELLER, AND IT IS NOT TO BE USED AS A
SUBSTITUTE FOR ANY INSPECTIONS OR WARRANTIES THAT THE BUYER MAY OBTAIN. Nothing in the
document precludes the rights or duties of the BUYER to inspect the physical condition of the Property.
The property disclosure document is not a part of this Agreement.
□ The SELLER’S completed property disclosure document is not attached.
Comments:
Line 402 – This line provides a checkbox to select if the Seller’s completed property
disclosure document will be attached to the purchase offer. A blank is also
provided on this line for the date of the Seller’s property disclosure document.
Line 403 – This lines states that the property disclosure document was completed
by the Seller in compliance with Louisiana State law. The document sets forth the
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minimum disclosure required for a Seller of residential real property as to the
condition of the Property.
Lines 405 – 407 – These lines further advise the Buyer that the property disclosure
document is not to be considered a warranty by the Seller of the condition of the
Property. The property disclosure document is not to be used in lieu of any
inspections that the Buyer may wish to conduct.
Lines 407 – 408 – These lines provide that receipt of the property disclosure
document does not prohibit the Buyer from a physical inspection of the Property.
Line 409 – This line provides that the property disclosure document itself is not
incorporated into the Statewide Purchase Agreement Form. This is a separate
document.
Line 411 – This line provides a checkbox to select if the Seller’s property disclosure
document is not attached to the Statewide Purchase Agreement Form.
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II.
FREQUENTLY ASKED QUESTIONS
1.
Who is required to use the Statewide Purchase Agreement
Form?
All licensees representing either the Buyer or Seller of residential real
property shall complete the Statewide Purchase Agreement Form prescribed
by the LREC in making an offer to purchase or sell residential real property.
2.
When do real estate licensees need to start using the Statewide
Purchase Agreement Form?
The Statewide Purchase Agreement Form shall be used by licensees on all
sales of residential real property on or after January 1, 2008.
3.
What is the definition of “residential real property”?
“Residential real property” for purposes of this law means real property
consisting of one or not more than four residential dwelling units which are
buildings or structures each of which are occupied or intended for occupancy
as single family residences.
4.
Do all Buyers and Sellers have to use the new Statewide
Purchase Agreement Form?
Buyers and Sellers who do not use the licensed real estate agents or brokers
are not required to use the Statewide Purchase Agreement Form.
5.
Where can I obtain
Agreement Form?
a
copy
of
the
Statewide
Purchase
The form is available on the LREC website at http://www.lrec.state.la.us/
Further, the Louisiana REALTORS® has copies of the form available on its
website http://www.larealtors.org/.
6.
Do I need to use this Statewide Purchase Agreement Form for
undeveloped land?
No. This Statewide Purchase Agreement Form only needs to be used for
residential real property and not undeveloped nonresidential land.
7.
Do I need to use this Statewide Purchase Agreement Form for
commercial property?
No. This Statewide Purchase Agreement Form only needs to be used for
residential real property.
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8.
Do I need to use this Statewide Purchase Agreement Form for
condominiums?
Yes. Condominiums are generally included in the definition of residential real
property.
9.
Do I need to use this Statewide Purchase Agreement Form for
new construction of homes?
Yes. Residential real property generally includes new homes.
10.
What type of addendum can I attach to the Statewide Purchase
Agreement Form?
Any addendum desired by the Buyer or Seller making their offer or
counteroffer can be attached to the Statewide Purchase Agreement Form.
The LREC has plans to have certain addendums as samples available on its
website. These addendums shall not be mandated, but are just forms for
use if desired by licensees.
11.
Is there a limit on what I can include on an addendum to the
Statewide Purchase Agreement Form?
No.
The legislation mandating the form did not include a limit on
addendums. Any term of an offer or counteroffer may be included on an
addendum.
12.
Can the Statewide Purchase Agreement Form be altered?
No. The pre-printed portions of the Statewide Purchase Agreement Form
itself cannot be altered. No strike-through of the pre-existing portions of the
Statewide Purchase Agreement Form is allowed and no handwritten or typed
additions to the pre-printed form itself such as in margins is allowed. There
are blank lines in the Statewide Purchase Agreement Form for handwritten or
typed additional terms. Lines 288 through 297 of the Statewide Purchase
Agreement Form also provide blank lines for adding additional terms. All
other revisions to the Statewide Purchase Agreement Form shall be made in
the form of addendums or amendments to the Statewide Purchase
Agreement Form.
13.
Is there a possible sanction if a licensee fails to use the
Statewide Purchase Agreement Form?
Yes, as with any other provision of the license law, potentially the failure of a
licensee to comply with the statute can result in a licensee being sanctioned
or other penalty.
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14.
Does the Statewide Purchase Agreement Form count deadlines
by calendar or business days?
The Statewide Purchase Agreement Form uses calendar days throughout the
agreement.
This means all days count. There are no days that are not
counted such as holidays or weekends. A calendar day ends at 12:00
midnight in Louisiana.
15.
Is the Statewide Purchase Agreement Form on letter or legal
size paper?
The Statewide Purchase Agreement Form will print on letter size paper from
the LREC website. There is no LREC rule requiring a specific page size.
16.
What about font size for the Statewide Purchase Agreement
Form?
The font size should be at least 12 type per LREC rule.
17.
The
Statewide
Purchase
Agreement
Form
provides
circumstances when the deposit will be returned to the Buyer,
by the Seller. Does this mean licensees can return the deposit
without complying with the LREC rules?
No, the LREC rules on deposit still apply. See LREC Rules Chapter 29.
18.
Do I need to wait until after January 1, 2008 to begin using the
Statewide Purchase Agreement Form?
No. You can start using the form now if you want to use it.
19.
What happens if the Statewide Purchase Agreement Form is
electronically
transmitted
(faxed)
and
through
the
transmission process the font is reduced below 12pt type as
required by the Louisiana Real Estate Commission? Is this still
a valid purchase agreement?
The Louisiana Real Estate rule is that the Louisiana Statewide Purchase
Agreement form shall be in 12 pt font or greater. The intent of the rule from
the discussion of the LREC on the date the rule was enacted was to address
the initial font size of the contract. We do not believe that the LREC
commission addressed the reducing type size through the transmission
process. Further, the mandate of a statewide contract does not change the
general obligations laws of the Louisiana Civil Code and therefore it is very
unlikely a Court would rule that a contract was unenforceable merely
because upon the transmission of the document the font size was reduced
from 12 pt font.
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20.
Does the Statewide Purchase Agreement Form use Central Standard
Time or Daylight Savings Time?
The form uses “Louisiana time.” The time it is in Louisiana, whether Central
Standard Time or Daylight Savings Time, prevails.
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