Some contract “blanks” have a default, such as “3 days if left blank.” But others – sometimes important ones – do not. A quick hint: If there’s an asterisk near the line number, a blank should be reviewed. And remember that key dates and timeframes are important.
If your customer is satisfied with a contract’s default provision for blank spaces, you’re likely okay leaving that line blank. Some blanks, however, require that information be written into them or, quite simply, the answer is unknown. In other words, failing to note which lines must be completed – aka, the ones that do NOT have default provisions – can cause confusion. It could cause the parties to argue over what should now go onto that line, and, in worst cases, blow up the entire deal.
Using the Florida Realtors/Florida Bar “AS IS” Residential Contract for Sale and Purchase (“AS IS Contract”) for the purposes of this article, here are some examples of problematic blanks we’ve heard on Florida Realtors Legal Hotline:
- Personal Property section – paragraph 1(d) of the “AS IS” Contract provides a list of personal property items included with the sale of the real property. Among the items included are any existing range(s)/oven(s), refrigerator(s), light fixture(s) and ceiling fan(s). What isn’t included? For one, any washer or dryer that may exist on the property. Therefore, a buyer who would like an existing washer or dryer to be part of the sale must add the washer and dryer to the lines within that same paragraph in order for them to be part of the deal. On the flipside, sellers who have a family heirloom chandelier in the dining room that they wish to remove before closing, must make sure that the chandelier is excluded from the sale. This can be done in paragraph 1(e). A word of caution: Just because an item is listed in the MLS does NOT make that automatically part of the contract. The contract must clearly outline what is going and staying as that is the document that governs the parties.
- Escrow Agent information – paragraph 2(a) lays out what, if any, initial deposit is to be paid and also contains lines for the escrow agent information to be entered. Most transactions involve an initial deposit payment, but it’s hard for buyers to know where to send that money if this portion of the contract is blank. Additionally, FREC rules (61J2 of the Florida Administrative Code) require this information to be completed. It could cause an unnecessary dispute between parties if not completed – and you could also find yourself facing a FREC violation if you’re the agent preparing the offer.
- “CHECK ONE” Many sections of the contract have this instruction in bold, all-cap lettering. Some have default sections; some, however, do not. Therefore, it’s very important that the agents on both sides make sure information in those sections is completed appropriately per their respective customer’s instructions. An example of this is in paragraph 9(c) of the “AS IS” Contract. This section requires the parties to check a box that determines who will choose the closing agent and pay for certain closing costs. There is NO default provision here! One of the boxes must be checked! What happens if this is inadvertently left blank? Hopefully the parties can work something out and the transaction doesn’t fall apart. Again, since there is no default provision short of a compromise, this could end poorly for all involved.
- Home Warranty section – paragraph 9(e) covers whether or not a home warranty plan will be issued, who will pay for it, what company will issue it, and what cost it is capped at. An actual call to the Legal Hotline revealed that the box was checked and the seller was paying for a home warranty not to exceed $500 – but the box naming a company to issue the plan was left blank. To make matters worse, the buyer wanted the warranty issued by a company at $500 and the seller found a company that would issue one for $350. Without a home warranty company listed, again, the only hope is that the parties can work something out.
I hope these examples show how important it is to pay attention to blanks in contracts. I understand that making an offer and receiving one is an exciting point in the transaction after all the preceding hard work put forth by everyone involved. But if time isn’t taken to make sure the resulting contract is completed correctly, it can lead to unnecessary disputes later on.
Additionally, this advice doesn’t apply only to a buyer’s agent. Just because the buyer’s agent puts together the offer per his buyer’s directions, the listing agent should also take time to make sure the offer is completed appropriately per his seller’s directions. After all, everyone should have the same goal: to get the deal closed.
Pointing fingers at the “other side” if a dispute comes up over an issue with the contract doesn’t help anyone. As far as I see it, the more eyes reviewing the contract, i.e., buyers, sellers and agents, the less chance that something will be missed or inadvertently left blank.
I will close with my oft-repeated line in these articles: Taking the time at the beginning can save a lot of headache at the end. Good luck!
Meredith Caruso is Associate General Counsel for Florida Realtors
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