The Perils of Social Media

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Buyer Must Identify Reasons for Cancellation of a Contract

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Delivery of Unsigned Email Does not Constitute Contract Acceptance

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Waste can Occur With Seller Financing

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Generally, Property Managers Should Return Funds Within 35 Days

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Licensee Must Present All Offers

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Final Acceptance of Multiple Counter Offers

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AAR Brings You Standard Forms!

Below is a list of AAR’s forms accompanied by a short description. A sample of each form can be found by clicking on the name of the form below:

Addendum  – used to add additional terms to an existing contract or when there is not sufficient room on a purchase contract to include all the terms being offered.   (Rev. 06/93)

Additional Clause Addendum   – a compilation of the most commonly used contract clauses. Agents can print out this form, check the box next to the clause that applies and attach it to the purchase contract. (Rev. 10/14)

Additional Compensation Agreement  – used by an agent to disclose any additional compensation they may receive as a result of a transaction.   (Rev. 05/05)

Affidavit of Disclosure  – pursuant to A.R.S. §33-422, a seller of five or fewer parcels of land, other than subdivided land, in an unincorporated area of a county, and any subsequent seller of such a parcel, shall furnish a written affidavit of disclosure, in substantially the same form set forth in the statute, to the buyer at least seven days before the transfer of the property.  (Rev. 2011)

Agreement Notice Pursuant to the Short Sale Addendum  – for use in conjunction with the AAR Short Sale Addendum. In a short sale transaction utilizing the AAR Short Sale Addendum, the Contract is contingent upon an agreement between the Seller and Seller’s creditors to sell the Premises for less than the loan amount. If the Seller and Seller’s creditors enter into a short sale agreement, the Seller is obligated to immediately deliver a written “Agreement Notice” to the Buyer.  (02/12)

Application for Occupancy  – for help in gathering the information necessary to decide whether a prospective tenant meets the occupancy qualifications.  (Rev. 02/13)

Appraisal Contingency Notice  – if used with the Residential Resale Real Estate Purchase contract, this form allows the Buyer the opportunity to continue or not continue with the purchase of a home when the property fails to appraise for at least the purchase price.   (Rev. 08/13)

AS IS Addendum  – used to describe what the buyer and seller agree to when the property is sold “As Is”. (Rev. 09/15)

Buyer Broker Exclusive Employment Agreement  – an agreement for the buyer and the broker/agent to sign that spells out the type of property the buyer is looking for and the form of compensation, if any, the agent is to receive from the buyer. Establishes an exclusive arrangement between the buyer and the agent, similar to an exclusive listing agreement between a seller and a broker/agent.   (Rev. 02/10)

Buyer Contingency Addendum  – to be used when the underlying purchase contract is to be contingent upon one of the following two scenarios: (1) the buyer accepting an offer to purchase his or her real property; or (2) the closing of the buyer’s property that is already under contract.  (Rev. 02/14)

Buyer Pre-closing Walkthroughthe form is intended to encourage buyers to conduct a pre-closing walkthrough of the premises to be purchased and document their findings in a manner easily conveyed to the seller.  (02/13)

Commercial Buyer’s Inspection Notice and Seller’s Response form (BINSR)this new Commercial Buyer’s Inspection Notice and Seller’s Response form is designed for use with the AAR Commercial Purchase Contract. The form evidences that the buyer has completed and verified all desired due diligence and inspections, and the buyer has verified all important information. The form also evidences the buyer’s election to: accept the property in its present condition with no requested corrections or repairs; disapprove of the listed items and immediately cancel the contract; or provide the seller an opportunity to correct the listed disapproved items.  (02/10)

Commercial Real Estate Purchase Contract – used in commercial/industrial transactions, and includes provisions for financing.  (Rev. 02/16)

Commercial Seller’s Property Disclosure Statement SPDS  – Similar to the Residential SPDS, designated for use with commercial/industrial sales.  (Rev. 02/08)

Consent to Limited Representation  – is signed by a specific buyer and a specific seller who are in a limited dual representation arrangement with a real estate agent/firm. This form is referenced in the Agency Disclosure and Election form and should not be used unless the property has been identified. (Rev. 12/02)

Counter Offer  – used to make counter offers to initial purchase offers.  (Rev. 02/11)

Cure Period Notice  – used when a cure notice is required pursuant to the Residential Resale Real Estate Purchase or Vacant Land Purchase contract.  (Rev. 2/09)

Disclosure of Buyer Agency and Seller Waiver and Confirmation  – designed for a Buyer Broker to present to a Seller who is represented by a limited service company. This disclosure will inform the Seller of the Buyer agent’s role in the transaction.  (Rev. 08/05)

Domestic Water Well Addendum  – used to provide notice to the Buyer that the Buyer can expect to receive a Domestic Water Well/Use Addendum SPDS. Essentially, this language replaces language that used to be part of the Residential Purchase Contract.  (Rev. 11/13)

Domestic Water Well/Water Use Addendum Sellers Property Disclosure Statement (SPDS)  – used in conjunction with the Seller’s Property Disclosure Statement when property is served by a water well. (Rev. 02/12)

H.O.A. Condominium / Planned Community Addendum  –  a disclosure form describing association(s) governing the property, fees payable upon close of escrow,  information the buyer should receive, by  Arizona law, and the buyer’s offer to negotiate the various fees payable at close of escrow.  (Rev. 02/15)

Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards (Sales)  – used to meet requirements for lead-based paint disclosure for residential sales.  (Rev. 02/09)

Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards (Rentals)  – used to meet requirements for lead-based paint disclosure for rental properties.  (Rev. 02/09)

Loan Assumption Addendum  – used when a Buyer is assuming one or more loans that encumber a property being purchased.  (01-14)

Loan Status Update – used to update all parties to a transaction of the status of the Buyer’s loan application. This form is available in fillable/print format. (Rev. 09/15)

Market Conditions Advisory  – this form was developed to advise that the price a buyer is willing to pay and the price a seller is willing to accept for a specific property rests solely with the individuals involved in the transaction. (08/09)

Move-In/Move-Out Condition Checklist  – to be filled out by the tenant, and serves as notification to the tenant that the form is not a repair request.  (08/12)

Multiple Counter Offer – used when making counter offers to multiple parties.  (Rev. 02/12)

Multiple Offer/Counter Offer  – this form essentially mirrors the Multiple Counter Offer form. This form is intended for use by buyers making offers on multiple properties.  (02/12)

Mutual Cancellation of Property Management Agreement  – to be used to help owners and property managers with a simple solution for navigating the termination of a property management agreement.  (02/14)

Notice of 2 Day Access  –  use this form to provide the tenant with at least two (2) days notice that you/  landlord intend to enter the dwelling unit during reasonable hours to make repairs, conduct inspections, have services completed or exhibit the dwelling unit to prospective purchasers and tenants. (08/13)

Notice of Abandonment  – used to inform the tenant that the landlord considers the Premises to be abandoned, and provides a specific timeline and actions the landlord may take to regain possession of the Premises.  (08/13)

Notice of Cancellation of Property Management Agreement  – to be used as a simple solution to ensure that the proper notice is given to the Landlord when cancelling a Property Management Agreement.  (02/14)

Notice of Intention to Terminate Lease Agreement Due to Nonpayment of Rent  – this notice gives the tenant five (5) days to pay the past due rent and applicable fees or the lease will be terminated.        (Rev. 08/13)

Notice of Nonrenewal of Lease Agreement   – use this form to notify tenant(s) that the lease will not be renewed and that the tenant(s) must vacate the Premises upon a specific date.  (08/13)

Notice to Terminate Lease Agreement Due to Material Noncompliance  – this notice give the tenant  five (5) days to either remedy the breach or, if the breach is not remedied, serves as a 5-day notice of the termination of the lease. Certified mail constitutes legal delivery of the notice.  (Rev. 01/14)

Notice to Terminate Lease Agreement Due to Material Noncompliance Affecting Health and Safety  – this notice give the tenant ten (10) days to either cure the breach or, if the breach is not curable, serves as a ten (10) day notice of the termination of the lease.  (Rev.08/13)

Notice to Immediately Terminate Lease Agreement Due to Material and Irreparable Noncompliance  – notifies the tenant of immediate termination of lease agreement upon receipt of the notice.  (Rev. 08/13)

Notice to Tenant of Management Termination  – used to provide the tenant with notice that the property management company will no longer be managing the property the tenant is leasing, and provide instructions on where to send future payments, notices and repair requests.  (08/13)

Onsite Wastewater Treatment Facility Addendum  – a disclosure to the Buyer that an Onsite Wastewater Treatment Facility exists on the property and outlines what information and in what time frames the Buyer will receive from the Seller.  (Rev. 10/06)

Pre-Qualification Form  – to be completed by the lender. This form is to be used in conjunction with the AAR Residential Resale Real Estate Purchase Contract or Vacant Land/Lot Purchase Contract (“Contract”) to provide information on the buyer’s ability to qualify for a loan. This form is available in fillable/print format.  (Rev. 02/16)

Property Management Agreement  – this form should assist property managers in clearly and unambiguously setting forth the rights and obligations of the Broker and the Owner. (02/16)

Real Estate Agency Disclosure and Election (READE)used by agents with either buyers or sellers. It describes the different types of agency relationships (seller, buyer, limited dual) and offers a section for the seller or buyer to elect which type of relationship they would like to have with that agent. This form is not an employment agreement. For example, an employment agreement with a seller is a listing (which AAR does not have- local associations do); an employment agreement with the buyer could be the AAR Right to (Buyer-Broker Exclusive Employment Agreement). The same form should not be signed by both a buyer and a seller.  (Rev. 02/09)

Referral Fee Agreement this form may be used when clients are being outsourced to another real estate agent to purchase, sell or lease property.  The originating brokerage sends the client to the receiving brokerage who agrees to compensate the originating brokerage for the client referral.  (10/14)

Request for Loan Information  – used for sellers to obtain necessary information from the lender to share with the buyer when the loan can be assumed by the buyer, and for the seller to determine proceeds from the transaction.  (Rev. 4/91)

Residential Buyer’s Inspection Notice and Seller’s Response (BINSR) –  directly addresses the inspection period in the Residential Purchase Contract and provides for the buyer to respond to a home inspection whether it is to request repairs, waive the inspection, or to cancel the contract. This form also provides for the seller to respond to any requests from the buyer.  (Rev. 02/11)

Residential Income Property Addendum to Residential Seller’s Property Disclosure Statement (1-4 Units)  – is an addendum to the Residential Seller’s Property Disclosure Statement to address disclosure issues in a transaction involving 1 to 4 units of income property. (Rev. 8/07)

Residential Income Property Addendum to AAR Residential Resale Real Estate Purchase Contract (1-4 Units) – an addendum to the contract in a transaction involving 1 to 4 units of income property. The Addendum requires the seller to complete an AAR Residential Income Property Addendum to the Residential Seller’s Property Disclosure Statement (8/07) and provide additional information. The Addendum also addressed the transfer of any domain name, signage, as well as rents, deposits, property managers, and registration of rental property with the county assessor. (Rev. 08/07)

Residential Lease Agreement  – used by tenants and landlords to rent a residential dwelling. (Rev. 06/16)

Residential Lease Owner’s Property Disclosure Statement  – for owners to complete when offering their home for lease. The use of this form is not a legal requirement. This form provides an opportunity for the owners to disclose information about the condition of the property being offered for lease and should not be completed by the Property Manager.  (08/11)

Residential Seller’s Property Disclosure Statement (SPDS) – for sellers to complete when offering their home for sale. This form provides an opportunity for the sellers to disclose information about the condition of the property being offered for sale and should not be completed by the REALTOR®. Although this form is not a legal requirement, the seller is obligated to complete and deliver the form to the buyer within five (5) days after contract acceptance.  (Rev. 06/14)

Residential Resale Real Estate Purchase Contractused for the sale of residential property.  (Rev. 02/16)

Seller Financing Addendum (Only 1 Residential Property)to be used in a credit transaction – secured by a dwelling when Seller is providing financing for only one(1) residential property in any 12-month period.  (Rev. 02/14)

Seller Financing Addendum  (3 or fewer Residential Properties )to be used in a credit transaction – secured by a dwelling when Seller is providing financing for three (3) or fewer residential properties in any 12-month period.  (Rev. 02-14)

Seller Financing Addendum (Not Secured by a Dwelling) to be used when sellers are originating financing for raw land, commercial properties and other transactions not secured by a dwelling.         (Rev. 02/14)

Short Sale Addendum to Listing Contract – an addendum to the listing agreement which addresses the information a seller should consider before entering into a short sale agreement.  (Rev. 08/10)

Short Sale Addendum to the Residential Resale Real Estate Purchase Contract  – an addendum to the residential contract for use in a short sale transaction. The Short Sale Addendum provides that the Contract is contingent upon an agreement between the seller and the lender, acceptable to both, to sell the home to the buyer for less than the loan amount.  (Rev. 09/15)

Short Sale Addendum to Commercial Listing Contract – an addendum to the listing agreement which addresses the information a seller should consider before entering into a short sale agreement. The seller is advised to explore options other than a short sale.  (02/10)

Short Sale Addendum to the Commercial Purchase Contract – an addendum to the commercial contract for use in a short sale transaction. When the parties execute the Short Sale Addendum to the Commercial Purchase Contract, they are agreeing that the contract will be contingent on an acceptable short sale agreement.  (02/10)

Statement of Disposition of Deposits and Accountingused to provide an itemized list of any/all security deposit deductions together with the amount due and payable to the tenant.  (08/13)

Unfulfilled Loan Contingency Notice – a generic form used by a buyer to notify the proper parties of a residential resale real estate contract of an unfulfilled loan contingency.  (Rev. 02/11)

Unrepresented Seller Compensation Consentan agreement for brokers/agents representing buyers who want to purchase a property from an unrepresented seller and/or when there isn’t a listing. This form provides for compensation for the seller to the buyer’s broker/agent.  (Rev. 02/07)

Vacant Land/Lot Purchase Contract used for the sale of lots or large acreage. (Rev. 02/16)

Vacant Land/Lot Seller’s Property Disclosure Statement (SPDS) – similar to the Residential SPDS, designed for use with land sales. (Rev. 02/08)

Vacant Land/Lot Buyer’s Due Diligence Notice and Seller’s Responseused to directly address the inspection period in the Vacant Land/Lot Purchase Contract. This form is used by the buyer to respond to an inspection, to request repairs, waive the inspection, or to cancel the contract. The form also provides for the seller to respond to any requests from the buyer.  (Rev. 02/13)

Vacant Land/Lot Purchase Contract Addendum Regarding Subdivided or Unsubdivided Land – used when certain types of land parcels are being sold. (Rev. 8/07)

Page Updated: 06/16

Wire Transfer Fraud Scams Are on the Rise

In May 2015, AAR published an article regarding hackers committing wire transfer fraud in Arizona.

Since that article, wire transfer fraud scams are on the rise nationwide. Due to the influx and severity of the scams, the Federal Trade Commission (FTC) and National Association of REALTORS® (NAR) have increased their efforts to warn the public and REALTORS® alike.

If you’re buying a home and get an email with money-wiring instructions, STOP. Email is not a secure way to send financial information, and your real estate professional or title company should know that. If it’s a phishing email, report it to the FTC. – www.consumer.ftc.gov

Specifically, the FTC and NAR have issued warnings and helpful tips on how to avoid wire transfer fraud scams on their respective consumer and media blogs. Additionally, NAR released a video addressing the issue.

While reviewing and sharing the video and articles are important to ensure that security measures are in place for each transaction, the FTC also urges consumers to report the scams for further action.

Rejecting Prospective Residents Based on Criminal History May Violate Fair Housing Laws

Throughout the United States, individuals with criminal records, regardless of whether they pose little or no threat, face significant barriers when seeking to buy or rent a home.

Amazingly, between 70 million and 100 million Americans, or as many as one in three American adults, have some type of criminal record. And while many have been convicted of only minor offenses, having a criminal record carries a lifetime of consequences. This often includes an inability to secure housing.

The Federal Fair Housing Act prohibits discrimination in the sale, rental, or financing of dwellings and in other housing-related activities on the basis of race, color, religion, sex, disability, familial status or national origin. Ex-convicts and individuals with a criminal history are not explicitly identified by the Act as a protected class. Nonetheless, the United States Department of Housing and Urban Development (HUD) recently opined that housing providers rejecting tenants or buyers based on their criminal records may violate the Fair Housing Act.

At its core, the issue is whether exclusionary polices based on criminal background checks have an unfair or disparate impact on certain racial minorities who are protected under federal laws governing housing.

On April 4, 2016, HUD’s Office of General Counsel issued guidance concerning how the Fair Housing Act applies to prospective buyers and tenants with criminal records. According to the opinion, landlords and sellers must differentiate between arrests and convictions, and must steer clear of blanket policies that restrict access to housing solely on the basis of criminal history.

HUD’s opinion does not mean that housing providers are entirely prohibited from considering criminal records. However, they must now ensure that their screening policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest.

As HUD notes, “A housing provider must, however, be able to prove through reliable evidence that its policy or practice of making housing decisions based on criminal history actually assists in protecting resident safety and/or property.” To meet this burden, housing providers must consider factors like the nature and severity of the crime, as well as the length of time since the conviction. By conducting this analysis, housing providers can establish that their policy “accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property, and criminal conduct that does not.”

At the heart of HUD’s opinion lies the doctrine of disparate impact, sometime referred to as unintentional discrimination. Pursuant to this doctrine, a policy may be considered discriminatory if it has a disproportionate adverse impact against a protected class. For example, a policy that applies to everyone may still prove discriminatory if it tends to affect a protected group or minority more than others.

As applied to its position on criminal history based restrictions, HUD notes that across the United States, certain minorities are arrested, convicted and incarcerated at rates “disproportionate to their share of the general population.” As a result, restricting access to housing on the basis of criminal history is likely to have a disproportionate adverse impact on racial minorities which constitute a protected class.

HUD’s April 4th guidance also outlines the three steps considered when analyzing claims that housing was denied on the basis of criminal history:

  1. Whether the policy or practice has a discriminatory effect;
  2. Whether the policy or practice is necessary to achieve a legitimate, nondiscriminatory interest; and
  3. Whether there is a less discriminatory alternative.

If nothing else, landlords and property managers should take the time to update and revise their screening policies to ensure that their use of criminal background checks does not act as an arbitrary and overbroad ban on those with criminal records. All criminal records are not alike, and not all ex-convicts pose a risk to safety or property. And now, housing providers who do not take this into account may find themselves on the wrong side of the law.

Scott M. Drucker, Esq., a licensed Arizona attorney, is General Counsel for the Arizona Association of REALTORS® serving as the primary legal advisor to the association. This article is of a general nature and reflects only the opinion of the author at the time it was drafted. It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.

Related article: Fair Housing Act: Criminal History-Based Practices and Policies