The Central Carolina Realtors® Association recently amended its sales contract. Many agents however are still presenting offers on the 2008 and 2011 versions of the contract. There are three salient reasons why a real estate agent should only use the most recent version of the contract.
First, a real estate agent should not use an old version of any contract unless the agent fully explains to the client all of the contract differences. Since that is not practical, an agent should always present the most recent contract form offered by the Association.
Secondly, even if the agent could fully disclose the contract differences, the agent should have the client waive any forfeited benefit in using the older version. For example, in the 2008 version of the CCRA contract if a party unreasonably refuses to release the earnest money, the prevailing party can recover attorney fees and court costs if a legal action is brought. In the current CCRA contract the prevailing party can also be awarded treble damages (three times the earnest money) if the other party wrongfully refuses to release the earnest money. If the agent fails to fully disclose this vast difference and have the client acknowledge waiving the benefit in writing, the agent can find themselves paying the difference. There are other similar issues in the contract that the client would need to waive because of the different possible outcomes based on the contract used.
Lastly, contracts drafted by the local Realtor® Association are owned by the Association. The Association grants real estate agents a limited, revocable license to use the contract. When the Association drafts a new contract or revises an existing contract, the Association typically revokes the license to use the old version and grants a revocable license to use the new version. Therefore, in most cases the agent no longer has the legal right to use the old contract.
Therefore, real estate agents should always present offers on the newest version of the contract as well as demand all offers on the newest form.
Today’s Historical Fact: The Kress Building is located on Main Street and was built in 1934 by S.H. Kress & Company. S.H. Kress was a “five and dime” retail department store which operated in the United States from 1896 to 1981. Kress stores were typically located on “Main Street.” Historic Kress Buildings are located all across the country in towns such as Tampa, Lubbock, El Paso and Charleston, S.C. The Columbia Kress Building is a two-story, Art Deco style building. It has been on the National Register of Historic Places since 1979.
Don’t forget to sign-up for MCE/CE classes at Blaircato.com. Space is limited and running out.