For the first time since February 2017, the Arizona REALTORS® will release a revised version of the Residential Resale Real Estate Purchase Contract (Residential Purchase Contract). The updated Residential Purchase Contract, which will be released for use on February 1, 2020, will contain the following three revisions:
- Solar Lease / Solar Loan Assumption Addendum
Section 1f of the Residential Purchase Contract, titled Addenda Incorporated, contains a list of possible Addenda that the parties may choose to incorporate into the transaction. On October 1, 2017, the Arizona REALTORS® published a new form titled Solar Lease / Solar Loan Assumption Addendum. Because this Addendum was published after the release of the February 2017 Residential Purchase Contract, it was not listed in Section 1f. As of February 2020, the Solar Lease / Solar Loan Assumption Addendum will now be identified in Section 1f as an available option for the parties to select.
- Smart Home Devices
Since February 2017, the use of smart products which allow homeowners the ability to remotely control and monitor devices and appliances within the home, has increased dramatically. However, the February 2017 Residential Purchase Contract does not directly address smart home devices, leading to occasional disagreements as to whether these devices convey. To clarify the issue, a change has been made to Section 1g, titled Fixtures and Personal Property.
Section 1g identifies existing fixtures and personal property that convey with the sale. Now included in that list are:
• smart home devices, access to which shall be transferred (i.e., video doorbell, automated thermostat)
Not only must these products now remain in the home to the extent that they are affixed to the Premises, the seller must provide the buyer with the means to operate the devices, which often necessitates access to an on-line app. Upon obtaining access, buyers are encouraged to change all associated usernames and passwords.
- Seller Concessions
In February 2017, a workgroup charged with revising the Residential Purchase Contract more strictly defined the term “Seller Concessions” as used in Section 2j. Despite the change, buyers and sellers did not always agree as to whether an item constituted an appropriate seller concession, often leaving title companies to make the difficult decision.
Rather than continue to impose restrictions on seller concessions, the Risk Management Committee deemed it prudent to expand the scope of seller concessions to include all buyer costs allowed by the buyer’s lender. Section 2j will now read as follows:
SELLER CONCESSIONS (if any): In addition to the other costs Seller has agreed to pay herein, Seller will credit Buyer _______% of the Purchase Price OR $_______ (Seller Concessions). The Seller Concessions may be used for any Buyer fee, cost, charge, or expenditure to the extent allowed by Buyer’s lender.
As a result of this change, it is more likely that buyers will utilize the entire amount of the seller concessions set forth in Section 2j, which is typically the seller’s original expectation.
To see these revisions within the context of the contract, a draft copy of the February 2020 Residential Resale Real Estate Purchase Contract evidencing the changes in red-line format has been released. This draft is to be used strictly for educational purposes. On February 1, 2020 the revised Residential Purchase Contract will be ready for use within TransactionDesk, zipForm, and all other Arizona REALTORS® forms platforms.